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Analysis: European defense contracts

By LEANDER SCHAERLAECKENS, UPI Correspondent

BRUSSELS, July 22 (UPI) -- nCipher bought out by Thales UK

nCipher, a British encryption specialist, has been purchased by Thales for $102 million. The move was aimed at securing Thales' market share in Britain.

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The company is only 12 years old, but it already has generated $48 million in revenue annually, and it has been listed on the London Stock Exchange for eight years.

nCipher is based in Cambridge, England, and most of its business comes from Britain and the United States. It primarily supplies civilian entities with management and cryptographic systems. A major client has been the financial sector.

Thales has been keen to broaden its reach in the booming British security and defense market.


Lockheed Martin awards deals to Dutch and Norwegian companies for F-35

Lockheed Martin has awarded two subcontracts to DapTechnology from the Netherlands and Kongsberg Defense and Aerospace in Norway as part of the F-35 Lightning II Joint Strike Fighter program.

DapTechnology will supply the FireTrac IEEE 1394b test and simulation platform, which will support the message system technology with real-time data recording and simulation.

Kongsberg Defense and Aerospace will be charged with the production of composite and titanium parts for the Joint Strike Fighter.

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KDA's deal is thought to potentially be worth roughly $1.3 billion. The value of DapTechnology's contract is not known.

KDA's involvement in the deal was a mandatory condition for Lockheed Martin's being awarded the contract to replace Norway's fighter jets.

KDA will be the exclusive supplier to the Joint Strike Fighter program. The parts are thought to be worth almost $200 million. The remaining $1.1 billion is for potential future assignments included in the contract.

Production at KDA will start in January and should wrap up by 2015.


Britain may scrap procurement system for missiles

If it's up to British Procurement Minister Baroness Ann Taylor, the way British defense contracts are awarded will change drastically.

In the first move of what eventually could lead to a massive industry overhaul, Taylor is expected to announce that a series of contracts for the upgrading, updating or construction of missiles has been awarded to a partnership of at least four companies. None of the companies had to enter a competition for the awarding of the contract, Defense News reports.

MBDA, QinetiQ, Roxel, Thales UK and possibly Raytheon Systems -- with whom negotiations are continuing -- will be part of Team Complex Weapons. This team probably will be given concept or assessment contracts for the Selection Precision Effects at Range program, upgrade of the Storm Shadow cruise missile, several different types of missiles for the Royal Navy's helicopter-mounted future anti-surface guided weapon, a new anti-air weapon for the Sea Wolf onboard Type 23 as well as the Future Surface Combatant frigates and also to produce loitering munitions.

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This new method flies in the face of the traditional British competition system and ultimately could change the way contracts are awarded in all defense sectors and possibly even in all British government procedures.

The MBDA and Thales UK deals were not officially confirmed, but they did appear to be acknowledged in a bulletin released by the British Ministry of Defense. The MBDA deal is worth $108.7 million and Thales's is worth $8.7 million, according to the bulletin.

The Team Complex Weapons idea had been in the works for two years when former procurement minister Lord Paul Drayson unveiled it to ensure that local business was protected.

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