.Big-budget fight to stop bombs in Iraq
In January 2005, Jamel Daniels was in the machine-gun turret of a Humvee on routine patrol in the central Iraqi town of Al-Iskandariyah.
Part of the 28-year-old Marine corporal's job was to keep an eye out for improvised explosive devices, the deadly roadside bombs that are considered the prime killer of U.S. troops.
Daniels said two of the other Humvees in the four-vehicle convoy were equipped with a device to detect IEDs. But a bomb exploded beneath his Humvee, tossing it into the air and instantly killing three of the five soldiers aboard.
Daniels, of Manhattan, survived, but now has an artificial leg. "Basically, you couldn't detect them at all," he said recently.
The military has had mixed success in dealing with the bombs, and defense contractors across the country are trying to improve on that. More and more of them are getting into the brand-new business of designing equipment to render IEDs inoperative. The Pentagon is so concerned about IED-related deaths that it is spending more than $4 billion a year to have military contractors build devices to defeat the bombs.
The bombs are responsible for approximately two-thirds of the 3,100 U.S. combat deaths since the Iraq war began in 2003. Eighty-eight people from New York City and Long Island have died in Iraq since then, and of those, 39 were killed by IEDs, according to the U.S. Department of Defense.
Focus on EDO
EDO Corp., a relatively small military contractor headquartered in Manhattan, has quietly become the Pentagon's largest provider of such counter-IED devices. But lots of defense companies are taking aim at what EDO has got -- hundreds of millions of dollars in Pentagon money.
EDO, which has facilities in North Amityville and Bohemia, is the sole manufacturer of a new system called CREW 2.1, which emits a signal that jams the signals sent to an IED, rendering some types of the explosives inoperative. EDO received CREW 2.1 orders in April. A Navy official Friday was unable to say whether the devices have been deployed.
Daniels said he did not know what type of counter-IED device his convoy was equipped with in 2005. And the Department of Defense said it would be impossible now, nearly three years later, to confirm that a device was deployed on that particular convoy.
EDO did have a device in production at that time, which later was discontinued. But James Smith, EDO's chairman and chief executive, said "it was conceivable but not likely" the device was one of EDO's because the company only had a very small percentage of such devices at the time.
Other defense contractors have made various devices to counter IEDs. Insurgents have quickly found new ways to detonate bombs, military officials say, requiring changes to the counter-IED equipment.
IEDs can vary drastically in size, shape and weight. They can be packaged in objects as small as cell phones or transported in large trucks.
There's a good reason EDO has become so popular in the defense industry and on Wall Street, where its stock has doubled this year.
In the last two years alone, budgets to counter IEDs have grown to $4.4 billion from $3.3 billion. In 2004, only $500 million was budgeted.
EDO became an attractive takeover target, not only because of its counter-IED contracts, but also because it has been manufacturing electronic jamming equipment for the Navy and the Air Force for decades. The devices jam radar or signals from hostile forces trying to deliver bombs or other weapons.
On Sept. 17, ITT Corp. of White Plains announced it had offered $56 a share for EDO, or $1.7 billion, an 8 percent premium over EDO's closing price the previous Friday. The deal must still be approved by EDO shareholders.
"I definitely believe that counter IED will become a primary focus area for future procurements by the DOD," said Michael Lewis, who follows the military contracting industry for the investment banking firm BB&T Capital Markets in Washington. "At the end of the day, the competition will be fierce."
Several counter-IED systems
Christine DeVries, a spokeswoman for a Pentagon agency called the Joint Improvised Explosive Device Defeat Organization, formed last year to field initiatives to counter IEDs, said, "We got over 1,100 proposals" from defense contractors last year. "We invested in about one-quarter of them" and ultimately put 82 out in the field, she said.
Pentagon officials do not say, for security reasons, how many counter-IED systems are actually on the ground in Iraq. While industry has been stepping up its efforts to respond to the need to counter IEDs, the task remains difficult.
Pentagon planners said IEDs are easy and inexpensive for terrorists to manufacture, and that terrorists continue to find new ways to set off explosive devices, including through the use of infrared triggers that use beams of light.
John Pike, director of globalsecurity.org, a Washington-based military think tank, said expectations are that the United States and its allies will be battling IEDs long after American troops withdraw from Iraq.
"I would imagine we would be doing that for a long time to come," Pike said.
Lewis identified seven defense contractors who have played significant roles in developing counter-IED devices. They are BAE Systems, General Dynamics Corp., Lockheed Martin Corp., Sierra Nevada Corp., Syracuse Research Corp., Allen-Vanguard Corp., and EDO.
EDO has cornered the market for vehicle-mounted electronic counter-IED jamming systems. In the past six months alone, EDO has compiled a stunning $527-million-funded backlog of orders to manufacture its CREW 2.1 system.
EDO's revenue from work on CREW 2.1 is expected to be about 20 percent of total sales in 2007, which are estimated at about $1.1 billion. CREW 2.1 revenues in '06 were only 4 percent of overall sales of $715 million.
The systems are made at company facilities in Morgan Hill, Calif., and Nashua, N.H. Smith said last week, after the company received its latest order -- $172 million for 2,250 systems -- that it is prepared to open production lines at "multiple EDO facilities" to make the devices. About 600 of EDO's total workforce of 4,000 are employed at facilities in North Amityville and Bohemia.
In an interview last week, Smith noted the company he chaired in the 1990s, AIL Systems Inc. of Deer Park, which in 2000 merged with EDO, had been in the business of making jamming systems since World War II. EDO had built several versions of counter-IED jamming systems before CREW 2.1.
Opinions are divided on how effective any of the counter-IED systems are. William Hartung, an analyst at the New American Foundation, a liberal-leaning, Washington-based foreign policy think tank, said it does not appear that such devices have had "a significant impact" on the IED problem.
Loren Thompson, an analyst for the Lexington Institute, a conservative think tank in Washington, said the preventive devices do work, but "the enemy's tactics keep changing. That means that a system that worked very well against last year's threat may work poorly against today's threat. I think because they worked so well in Iraq, they will be used elsewhere. This is a poor man's way of bringing a powerful army to its knees."
Daniels, who was discharged from the Marines in August 2006, after spending months recovering from his injuries at Walter Red Army Medical Center in Washington, said he and other soldiers had little faith in the devices made to counter IEDs, primarily because insurgents have been so successful in improvising.
"These guys come up with new stuff every single day, and we're just trying to play catch-up," Daniels said.
But, he said, he supports efforts to blunt the IEDs. "You got to keep trying," he said.
Newsday
Where exactly do you go for a grant to fix the IED problem. Can it be possible, or are they just milking the cash cow.
Part of the 28-year-old Marine corporal's job was to keep an eye out for improvised explosive devices, the deadly roadside bombs that are considered the prime killer of U.S. troops.
Daniels said two of the other Humvees in the four-vehicle convoy were equipped with a device to detect IEDs. But a bomb exploded beneath his Humvee, tossing it into the air and instantly killing three of the five soldiers aboard.
Daniels, of Manhattan, survived, but now has an artificial leg. "Basically, you couldn't detect them at all," he said recently.
The military has had mixed success in dealing with the bombs, and defense contractors across the country are trying to improve on that. More and more of them are getting into the brand-new business of designing equipment to render IEDs inoperative. The Pentagon is so concerned about IED-related deaths that it is spending more than $4 billion a year to have military contractors build devices to defeat the bombs.
The bombs are responsible for approximately two-thirds of the 3,100 U.S. combat deaths since the Iraq war began in 2003. Eighty-eight people from New York City and Long Island have died in Iraq since then, and of those, 39 were killed by IEDs, according to the U.S. Department of Defense.
Focus on EDO
EDO Corp., a relatively small military contractor headquartered in Manhattan, has quietly become the Pentagon's largest provider of such counter-IED devices. But lots of defense companies are taking aim at what EDO has got -- hundreds of millions of dollars in Pentagon money.
EDO, which has facilities in North Amityville and Bohemia, is the sole manufacturer of a new system called CREW 2.1, which emits a signal that jams the signals sent to an IED, rendering some types of the explosives inoperative. EDO received CREW 2.1 orders in April. A Navy official Friday was unable to say whether the devices have been deployed.
Daniels said he did not know what type of counter-IED device his convoy was equipped with in 2005. And the Department of Defense said it would be impossible now, nearly three years later, to confirm that a device was deployed on that particular convoy.
EDO did have a device in production at that time, which later was discontinued. But James Smith, EDO's chairman and chief executive, said "it was conceivable but not likely" the device was one of EDO's because the company only had a very small percentage of such devices at the time.
Other defense contractors have made various devices to counter IEDs. Insurgents have quickly found new ways to detonate bombs, military officials say, requiring changes to the counter-IED equipment.
IEDs can vary drastically in size, shape and weight. They can be packaged in objects as small as cell phones or transported in large trucks.
There's a good reason EDO has become so popular in the defense industry and on Wall Street, where its stock has doubled this year.
In the last two years alone, budgets to counter IEDs have grown to $4.4 billion from $3.3 billion. In 2004, only $500 million was budgeted.
EDO became an attractive takeover target, not only because of its counter-IED contracts, but also because it has been manufacturing electronic jamming equipment for the Navy and the Air Force for decades. The devices jam radar or signals from hostile forces trying to deliver bombs or other weapons.
On Sept. 17, ITT Corp. of White Plains announced it had offered $56 a share for EDO, or $1.7 billion, an 8 percent premium over EDO's closing price the previous Friday. The deal must still be approved by EDO shareholders.
"I definitely believe that counter IED will become a primary focus area for future procurements by the DOD," said Michael Lewis, who follows the military contracting industry for the investment banking firm BB&T Capital Markets in Washington. "At the end of the day, the competition will be fierce."
Several counter-IED systems
Christine DeVries, a spokeswoman for a Pentagon agency called the Joint Improvised Explosive Device Defeat Organization, formed last year to field initiatives to counter IEDs, said, "We got over 1,100 proposals" from defense contractors last year. "We invested in about one-quarter of them" and ultimately put 82 out in the field, she said.
Pentagon officials do not say, for security reasons, how many counter-IED systems are actually on the ground in Iraq. While industry has been stepping up its efforts to respond to the need to counter IEDs, the task remains difficult.
Pentagon planners said IEDs are easy and inexpensive for terrorists to manufacture, and that terrorists continue to find new ways to set off explosive devices, including through the use of infrared triggers that use beams of light.
John Pike, director of globalsecurity.org, a Washington-based military think tank, said expectations are that the United States and its allies will be battling IEDs long after American troops withdraw from Iraq.
"I would imagine we would be doing that for a long time to come," Pike said.
Lewis identified seven defense contractors who have played significant roles in developing counter-IED devices. They are BAE Systems, General Dynamics Corp., Lockheed Martin Corp., Sierra Nevada Corp., Syracuse Research Corp., Allen-Vanguard Corp., and EDO.
EDO has cornered the market for vehicle-mounted electronic counter-IED jamming systems. In the past six months alone, EDO has compiled a stunning $527-million-funded backlog of orders to manufacture its CREW 2.1 system.
EDO's revenue from work on CREW 2.1 is expected to be about 20 percent of total sales in 2007, which are estimated at about $1.1 billion. CREW 2.1 revenues in '06 were only 4 percent of overall sales of $715 million.
The systems are made at company facilities in Morgan Hill, Calif., and Nashua, N.H. Smith said last week, after the company received its latest order -- $172 million for 2,250 systems -- that it is prepared to open production lines at "multiple EDO facilities" to make the devices. About 600 of EDO's total workforce of 4,000 are employed at facilities in North Amityville and Bohemia.
In an interview last week, Smith noted the company he chaired in the 1990s, AIL Systems Inc. of Deer Park, which in 2000 merged with EDO, had been in the business of making jamming systems since World War II. EDO had built several versions of counter-IED jamming systems before CREW 2.1.
Opinions are divided on how effective any of the counter-IED systems are. William Hartung, an analyst at the New American Foundation, a liberal-leaning, Washington-based foreign policy think tank, said it does not appear that such devices have had "a significant impact" on the IED problem.
Loren Thompson, an analyst for the Lexington Institute, a conservative think tank in Washington, said the preventive devices do work, but "the enemy's tactics keep changing. That means that a system that worked very well against last year's threat may work poorly against today's threat. I think because they worked so well in Iraq, they will be used elsewhere. This is a poor man's way of bringing a powerful army to its knees."
Daniels, who was discharged from the Marines in August 2006, after spending months recovering from his injuries at Walter Red Army Medical Center in Washington, said he and other soldiers had little faith in the devices made to counter IEDs, primarily because insurgents have been so successful in improvising.
"These guys come up with new stuff every single day, and we're just trying to play catch-up," Daniels said.
But, he said, he supports efforts to blunt the IEDs. "You got to keep trying," he said.
Newsday
Where exactly do you go for a grant to fix the IED problem. Can it be possible, or are they just milking the cash cow.
posted by madtom at 10:05 PM
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