Leidos' Strategic Partnerships: Strengthening Military and Government Capabilities

Types of Strategic Partnerships Leidos Engages In

Leidos engages in strategic partnerships primarily through collaborations with commercial partners in technology and defense sectors, focusing on enhancing national security. Additionally, they pursue significant contracts that bolster military capabilities, reflecting a commitment to strengthening their defense portfolio and international presence.

"And in addition to that, we have the organizational expertise that we have built, a small cadre, but a very capable group of individuals at the corporate office who are helping to build the customer relationships around the globe necessary and the experience in each of our segments, 3 segments primarily, aero, mission and defense, who each have products that have now successfully been sold and deployed globally." --- (NOC, conference, 2024/05/30)

"Separately, we also continue to advance our 21st Century security solution through collaboration with strategic commercial partners across the tech, telecom, microprocessor, and other industries to support the national defense." --- (LMT, earning call, 2024/Q1)

"In addition to very strong sales growth, Mission Technologies won strategic competitions in the quarter, including a $305 million contract to protect U.S. regional interest in the Republic of Korea, a $74 million contract to research, analyze and develop enhanced capabilities for vertical launching systems onboard U.S. Navy surface ships and in order to build a REMUS 620 unmanned underwater vehicle for an international customer." --- (HII, earning call, 2024/Q1)

"Overall, the defense portfolio is well positioned for the long term. There's strong demand across the customer base, the products are performing well in the field, and we're confident that our efforts to drive execution and stability will return this business performance levels that our investors will recognize." --- (BA, earning call, 2024/Q2)

"That's where the other opportunities that we just talked about and the increase there that we see in international, in armaments and integrated air and missile defense will become the stronger growers in the portfolio and aero returning to growth." --- (NOC, conference, 2024/05/30)

Key Projects and Technological Innovations from Partnerships

Leidos' strategic partnerships are driving key projects and technological innovations, such as advancements in next-generation propulsion for the F-35 and the recapitalization of the E-4B fleet. These initiatives enhance military capabilities and reinforce market leadership in defense technology.

"But more importantly, the budget supports our key programs and technologies, including next generation propulsion, critical munitions, and upgrades to the F-135, ensuring it remains the only engine powering every variant of the F-35 Joint Strike Fighter." --- (RTX, earning call, 2024/Q1)

"Yes. I think about our 5th generation capability both F22 and F35 and we've been working those are kind of foundational programs and working on improved technology from there." --- (LMT, conference, 2024/05/30)

"These initiatives not only expand market reach but also reinforce market leadership by staying ahead of competitors and driving innovation in defence technology solutions globally. Competitive" --- (NOC, press release, 2024/07/19)

"The new office will serve as an important hub for innovation, collaboration, and growth across the company's work with various branches of the U.S. military and national security agencies, as well as Enlighten's continued leadership in providing solutions for big data analysis." --- (HII, press release, 2024/08/05)

"This mission is especially urgent and our decades of experience designing for contested environments is critical to its success. This team of agile and proven leaders will bring together innovation, speed with discipline, advanced engineering and on-cost and accelerated deliveries to recapitalize the costly and aging E-4B fleet with next-generation capabilities." --- (RTX, press release, 2024/05/23)

Competitive Advantages and Customer Feedback on Partnerships

Leidos' strategic partnerships are driven by a focus on operational excellence and world-class security, as emphasized by customer feedback highlighting the need for dedicated, problem-solving partners. Additionally, maintaining competitiveness through innovation and quality performance is crucial for delivering superior solutions against high-end threats.

"Quality performance is required at every level of the global supply chain. It requires partners who can harness innovation and remain agile to deliver competitive advantage in both cost and quality." --- (LMT, press release, 2024/04/23)

"We are really positioned to provide the best solutions that our customer needs against a high-end threat, however, we are not looking to compete in a more commoditized part of the market that's very low cost and not survivable systems." --- (NOC, earning call, 2024/Q1)

"And when you talk to almost any customer of any type, whether it's a start up, whether it's a large enterprise, whether it's a government customer, across the board, the most important things that they are looking for is outstanding operational excellence and world class security and then a partner who's going to be very focused on them and be very partner focused to help them get through problems." --- (AMZN, conference, 2024/09/09)

"And what's interesting is they're asking for multiple types on NGI. And that's going to give them an opportunity to see what contract risk transfer to industry is now going to cost, at least in Lockheed Martin's case because we will reply on that basis to say, if you want us to have this kind of contract, we have to have a risk premium that's significantly higher than, let's just say, a pure cost-based contract to give you the greatest contrast." --- (LMT, earning call, 2024/Q1)

"We just focus on staying competitive and we've been able to do that across all those market segments over a long period of time and I don't think it's any different as we sit here today." --- (NOC, conference, 2024/05/30)

Future Outlook on Strategic Partnerships

Strategic partnerships in the defense sector are poised for growth, driven by significant backlogs, diverse capabilities, and a focus on long-term investments. Companies like Lockheed Martin and Northrop Grumman emphasize modernization and innovation to address evolving global security challenges and customer priorities.

"And so we feel really solid, as I think Jay said in his remarks, on Sikorsky's future with a backlog of $20 billion and the ability to modernize these really reliable in production aircraft to do new things and with missions in digital technology and other -- and integrate with other parts of LM and our partners to make those platforms relevant in the future. So I'll stop there. Jay, you have anything else you want to say?" --- (LMT, earning call, 2024/Q1)

"Current and future requirements related to the conflicts in Ukraine and Israel, threats in the Pacific regions and other security priorities, as well as global inflation, the national debt, and other domestic priorities, among other things, in the U.S. and globally, will continue to impact our customers’ budgets, spending and priorities, and our industry." --- (NOC, sec filing, 2024/Q1)

"And it's really the diversity and breadth of that portfolio from space to armaments to integrated air and missile defense and mission systems and microelectronics in general that are positioning the company not only for the growth we're experiencing today, but sustained growth into the future." --- (NOC, conference, 2024/05/30)

"And that's where a majority of my time will be focused while we also continue to position the business for the long term and make good choices on how we're spending our R and D and CapEx to fuel future growth into the 30s." --- (NOC, conference, 2024/05/30)

Impact of Partnerships on Military Readiness

Partnerships significantly enhance military readiness by providing advanced technology and operational support. The acquisition of C-130J-30 airlifters by Egypt and the establishment of a HIMARS Sustainment Center in Romania exemplify how international collaborations improve capabilities and interoperability among military forces.

"Egypt is the 23rd nation to join the Super Hercules fleet with the acquisition of two C-130J-30 tactical airlifters. As the most advanced and proven tactical airlifter in the world, the C-130J-30 delivers enhanced capability, additional versatility and increased power to EAF crews." --- (LMT, press release, 2024/09/05)

"We launched the first European HIMARS Sustainment Center in Romania. This facility enhances operational readiness for #HIMARS systems used by Romania and @NATO partners, exemplifying the importance of partner integration and interoperability globally." --- (LMT, twitter, 2024/06/14)

Collaboration with Government Agencies and Defense Contractors

Leidos collaborates closely with government agencies and defense contractors to navigate fiscal pressures and modernization demands. Key partnerships, such as those with DISA and Northrop Grumman, focus on enhancing military capabilities through innovative solutions and secure networks, supported by substantial government appropriations for defense.

"So from a top line perspective, no doubt there's more pressure under the Fiscal Responsibility Act and the caps that have been put in place today than we had a year ago, but also some strong demand signals for U. S. Modernization and dealing with the increasing costs associated with defense programs due to inflation and the need to continue with the efforts that are underway." --- (NOC, conference, 2024/05/30)

"This approach for negotiating contracts with our U.S. Government customers generally allows for recovery of our actual costs plus a reasonable profit margin." --- (LMT, sec filing, 2024/Q2)

"We look forward to continuing our long-standing partnership with DISA and reimagining new ways to provide a modern, secure and reliable network. GDIT is a business unit of General Dynamics, a global aerospace and defense company that offers a broad portfolio of products and services in business aviation; ship construction and repair; land combat vehicles, weapons systems and munitions; and technology products and services." --- (GD, press release, 2024/09/19)

"Defense, Space & Security Overview The Consolidated Appropriations Act, 2024, and the Further Consolidated Appropriations Act, 2024, enacted in March 2024, provided fiscal year 2024 appropriations for government departments and agencies, including $844 billion for the U.S. Department of Defense (U.S. DoD) and $25 billion for the National Aeronautics and Space Administration (NASA)." --- (BA, sec filing, 2024/Q2)

"We take a lot of pride in our support of government contractors. The work we do to help Northrop achieve Digital Transformation — primarily developing modernized applications in Microsoft 365 and Azure Government Community Cloud — allows them to support all branches of the DoD." --- (NOC, press release, 2024/04/01)