3SOF

This is September. No contract news until the Fiscal 2008 budget in October.

Predicting a slide waiting for good news. We are not in the budget yet, so the news could go either way as they argue the point.

The 5 billion plus already in 2008 are for program costs and only 1,520  vehicles. So the two ballpark numbers floated are 40 billion more above the present budget for all items.

And a seperate call by Biden for 15 billion for vehicles alone. Knowing the program will be stalled with only 1,520 vehicles in the budget so far.

Those are the high numbers anything less will be a compromise or an arguement to settle. As this is the third largest procurement program.

This is historic from every budget approval to include and fund MRAP because they do not want to compromise other priorities that are already agreed to.

Inside Defense....More this evening story

Pentagon acquisition officials are closely monitoring how well the five vendors awarded the bulk of MRAP production contracts to date are executing their shares of the program. According to internal Pentagon documents detailing vehicle deliveries obtained by InsideDefense.com and interviews with company spokesman, only two companies -- International Military and Government, Warrenville, IL, and Force Protection, Ladson, SC -- met MRAP production targets in August.

IMG delivered 77 vehicles and Force Protection -- with partner General Dynamics Land Systems, Sterling Heights, MI -- exceeded production goals by 13 vehicles, delivering 107 MRAPs.

The Pentagon is seeking $5.8 billion in the fiscal year 2008 emergency supplemental spending bill to buy 1,520 vehicles, plus a substantial portion of the logistics support packages and government-furnished equipment required for the 6,415 vehicles ordered in fiscal year 2007.

In addition, the Pentagon is preparing another MRAP spending request worth $9 billion to $10 billion to finance the purchase of another 6,000 blast-proof trucks in FY-08, according to Pentagon officials. This order stems from a decision last month by the Joint Requirements Oversight Council, first reported on Sept. 6 by InsideDefense.com, to cap the size of the MRAP program at 14,000 vehicles -- providing commanders in Iraq roughly half the total number armored trucks sought for Army units.

fyi from russia:
MRAP and MRAP II-production problem

(MRAP). Shortly after the outbreak of war in Iraq the United States Army has purchased small quantities of mine-protected vehicles (MRAP).
   
MRAP and MRAP II-production problem

MRAP proved to be very effective.In 2005 machines Cougar and Buffalo issued firm Force Protection, many times undermined by improvised explosive devices, without fatal consequences for the people living in them.

In February 2005, the number of landmine guerrilla attacks has increased dramatically, which led to an order for 1,169 machines MRAP Marines. But then, instead of specialized machines Marines had just Humvee with increased protection. But even after upgrading Humvee were virtually defenceless against mines. In mid-2006 the United States Marine Corps, repeated its request to the Joint Command. At the same time, the request was approved and officially started programs MRAP.

Potential required machines MRAP quickly rose from 1169 to 20,500 vehicles, with the next order 4000 machines to be delivered before the end of 2007. The main problem faced by the programme is that in 2007 to 4000 to MRAP, but no producer would do so in such a short period of time.

Therefore, the military opened a program for any MRAP manufacturers interested in producing these machines. The idea was to encourage the maximum number of manufacturers, and thus increase output.

In issued contracts were two main criteria:

1) The Contractor shall demonstrate the best characteristics of tests (with the protection of the crew is given the highest priority)

2) Contractors must demonstrate the ability to produce maximum output in the shortest possible time, and begin delivery as soon as possible after receipt of order

MRAP Tests and order machinery MRAP
Shortly military faced another problem. They were ready to order 4,000 machines by the end of 2007, while in late January 2007, it was necessary to put experienced samples. How that could be a full test orders to begin production and release of the remaining months of the required number of machines?

The only possible response, it was possible to reduce the time of testing. Thus, in February 2007 ordered 125 machines for Protection Force, 90 from BAE, a 60-PVI, a 100-Oshkosh and 20 from General Dynamics.

Usually full armour test takes several months, but now that possibility did not exist. It was therefore decided that the test samples will be experienced during 60-90 days. Most of the tests were checking security. But even they could not complete because of the time limit. Additional problems with the tests was that the producers began to disrupt delivery schedule or supply samples with a large number of gaps. Some of the machines needed to return producer and a repeat tests.

After testing the military had to make choices, based primarily on the protection of machinery and production capacity manufacturer. But given the great need for MRAP army in Iraq, the military decided to order some of their suppliers.

After testing of five suppliers of the contractors have not reached PVI and Oshkosh. Unknown, that the military has already done with these firms produced 160 cars. For example, machinery and BAE GD before serving in the army were to be refined.

The biggest job was MRAP company Navistar, which has set up his car MaxxPro.  MaxxPro a revised version of the truck, general International, in which a welded chassis with the V Corps figurative bronelistov location. Navistar is the joint property of International Military and State. Using serial chassis have confidence in the rapid razvorachivanii production. The office crew MaxxPro require much less welding than in the other car manufacturers. Where possible, take bolting compounds that significantly simplify production.  Bronezaschita is booking invoice, which is the Israeli company Plasan Sasa.

The fact that Navistar faced with the fact that Plasan Sasa has not been able to deliver the desired level of bronedetaley, they CBC different from American suppliers.

Plasan Sasa-known manufacturer of armour, and the test sample was tested with MaxxPro booking of the company. And the use of armour from suppliers that have not been tested, had raised fears for its quality.

Navistar Company announced that problems with the supply of armour would affect the total issued vehicles, which meant that the U.S. government has received 4,000 machines by the end of the year as hoped.  It is now expected that this number will be only 3,000.  But most likely, and these expectations are too optimistic. 

Armored Holdings (now bought BAE) also received a large contract for the development of its new-car Caiman. Caiman contract was received only in mid-July, so that other producers were compared with Armored Holdings additional three months to produce components for their vehicles. So Caiman production schedule to be extremely tight.

A producer on the programme MRAP has a lot of incentives to maximize their production capacity. What's more, they uspeyut issue, the less money from the program would flow to competitors. For the manufacture of new machines once it is essential to get a major order and master batch production. But the damage as a potential future loss of all contracts and the potential substantial damages. It is with this dilemma has already encountered Navistar, when it became clear that Plasan Sasa could not put bronedetaley necessary.

In the future, MRAP may have other problems. When Iraq was the first car Cougar and Buffalo, they have to refine, adapting to use in combat situations. It found a large number of specialized equipment, such as radios, military and other modules. When will I hear other machines, such MaxxPro is not known how they will be the same equipment, and how it will interact with already established. It may be that the army will be technology, which soon will require refinement. This problem is directly related to lack of testing conducted.

The next stage
Following the programme followed MRAP programs MRAP II. Machines that meet the requirements of MRAP II, to be a full test. Additional security requirements is another very common guerrilla weapon-shaped shells with explosives cored.

The new programme was opened for existing suppliers, and others, can offer its military machine. The list of potential suppliers MRAP II has up to 20 companies.

MRAP II program was announced before at least one car on the programme I MRAP (Caiman, RG33 or MaxxPro) test last fight. If you have any problems with the use of military machines of this type, the purchase may be interrupted, and hundreds of millions of dollars may be released to the winds.

For program MRAP II Protection Force announced the formation of the joint venture General Dynamics.  It will be called the Force Dynamics and will offer vehicles in the performance of MRAP Cougar II CAT I and CAT II. Moreover, the very Protection Force to propose MRAP II machine Cheetah. This is the latest development Force Protection, which has been spent the past few years. This machine is smaller and cheaper than its competitors, but has the same level of protection against mines and shells exploded in the emerging core.

Cheetah is a direct replacement for the Humvee. It is easier, less mobile and all other machines MRAP.

link:
http://www1.investorvillage.com/smbd.asp?mb=132&mn=109343&pt=msg&mid=2995103

Oliver, may be a false alarm but this looks like a bounce off a bottom of 15 with a possible trend reversal. It has crossed the 20 day moving average back upward.

Two things. If this is a reversal the short squeeze may be coming. One rumor of it is 16 million shares.

Second is that the probability of contracts in October is reinforced. There is supplemental legislation to fund the program if the Fiscal Budget is delayed. Many believe it will be late. And DoD has promised more contracts in October are in progress. To maintain production and allow vendors lead time to buy supplies and materials.

So the yearly September slump is seeing October where this thing notoriously takes off. I rode it for one point and took profits. But am definitely going back in before October.

I am invested again 

FRPT: Jumps +3.32%; Vol +83%; Last 90 Min of Trading
Thursday , September 20, 2007 16:21ET

During the last 90 minutes of today's session, shares of Force Protection, Inc (NasdaqSC: FRPT) demonstrated a strong UPWARD close relative to its 13:30 ET statistics. "Strong Closers" are determined by proprietary Knobias calculations performed during the last segment of each trading day.

sym: FRPT      @13:30 ET        @CLOSE      % CHANGE
----------   -----------   -----------  ------------
PRICE             $16.85        $17.41        +3.32%
VOLUME           420,000       767,300       +82.69%
#TRADES            1,599         3,088       +93.12%
DAY-HI            $17.04        $17.41       LATE-HI
DAY-LO            $16.45        $16.45           N/A

very tight bollinger bands

zigged when I should have zagged again. I am pessimism. I thought we were stalled at a proposed 7,700 vehicles for next year. Then the news hit that the total is now 15,374 vehicles and I do not know if that includes last years 6,415 or that is 15,374 vehicles for Fiscal 2008. The article seems to me saying 15,374 for 2008.

Read it for yourself and get back to me. I am waiting for my last trade to clear before I can jump at the 17.50 crossing.

JROC Boosts MRAP Requirement; Congress Struggles To Arrange Funding

DDN 20 September 2007

By Jen DiMascio

The Joint Requirements Oversight Council recently approved a new requirement for Mine Resistant Ambush Protected (MRAP) vehicles, pushing the Defense Department's total need for the hulking armored trucks to 15,374, according to congressional aides.

The amount reflects an increase of more than 7,000 of the vehicles needed, and an increase in the Army requirement to a total of 10,000 MRAPs, aides said.

The problem, said Rep. Gene Taylor (D-Miss.), is that the administration has not yet asked for the $11 billion portion of that anticipated amendment targeted for this next batch of MRAPs, and production lines for MRAP vehicles could run into trouble in February if the money is not available in October.

Taylor, the chairman of the House Armed Services seapower subcommittee, said he plans to communicate the need for a DoD request to Defense Secretary Robert Gates this week. Echoing comments he made in a July House Armed Services Committee hearing, Taylor said President Bush has the authority to direct Gates to order defense contractors to make these vehicles and added he will encourage Gates to do so.

A budget amendment to the Pentagon's FY'08 supplemental, widely expected to amount to about $50 billion, is expected to include funding for MRAPs. That amendment has been forwarded by the Defense Department to the Office of Management and Budget, though OMB is remaining mum about the details.

"Budget officials are analyzing the situation and [at] the appropriate time a request will be sent to Congress. I cannot speculate on time and amount at this point," wrote OMB press secretary Sean Kevelighan in a statement.

The request is no surprise. In July, John Young, who is in line to become the Pentagon's next chief weapons buyer, told lawmakers the administration would return with two more MRAP funding requests--one before the August recess and another in September. Later that month, the administration requested $5.3 billion for MRAP vehicles (Defense Daily, July 20).

Even though the administration has already asked for the additional $5.3 billion, Congress is not prepared to pass the supplemental--the vehicle that has been most often used to buy MRAPs-- before the end of the fiscal year.

Program officers and contractors have told congressional staff that DoD needs at least $5.3 billion by Oct. 1 to start buying the long-lead materials necessary to keep production lines running through February.

Appropriators are working to include that amount in a continuing resolution to fund basic Pentagon operations while Congress works to pass the defense appropriations bill for FY'08 as well as the supplemental, according to a congressional aide.

Earlier this week, Sen. Joseph Biden (D-Del.) introduced his amendment to the Senate defense authorization bill that would add $23.6 billion for MRAP vehicles.

The Joint Staff would not confirm the new number saying it is continually in flux based on the assessments of commanders.

Pentagon seeks enough MRAPs for all services
By Jeff Schogol, Stars and Stripes
Mideast edition, Friday, September 21, 2007

ARLINGTON, Va. — Defense officials have authorized 15,274 Mine Resistant Ambush Protected vehicles for all branches of the service, nearly double their previous target, Pentagon spokesman Geoff Morrell said Thursday.

Earlier this year officials had authorized 7,774 MRAPs for all of the services, including 3,700 for the Marine Corps and 2,500 for the Army. But the new authorization would allocate 10,000 MRAPs to the Army alone, Morrell said.

Morrell noted that the new requirement for MRAPs is subject to change.

"The idea here is that we think it's best to ask for as many as we may need, and if events on the ground change such that we need fewer of them, we could always off-ramp this and end up buying fewer. But we want to make sure we have enough to meet the needs of the force to best protect them," Morrell said.

The vehicles have V-shaped hulls that deflect blasts from underneath and have proved to withstand certain roadside bombs better than up-armored Humvees. The Defense Department plans to have 1,500 MRAPs in Iraq by the end of the year, Morrell said.

Earlier this year, the commander of Multi–National Corps–Iraq requested 17,700 MRAPs for the Army alone. On Thursday, Morrell said that figure was based on the idea of swapping all up-armored Humvees with MRAPs.

"We've done a closer evaluation, the joint chiefs have, and the evaluation has now suggested we need about 15,000 (for all the services)," Morrell said.

Morrell added that Defense Secretary Robert Gates has not yet signed off on the request, but said the Defense Department plans to ask Congress for funding for "many more MRAPs."

He declined to get more specific because the Defense Department's funding request has not yet been given to Congress.

Under the new authorized figure, the Marine Corps would still be allocated 3,700 MRAPs, the Air Force 697, the Navy 544, and U.S. Special Operations Command 333, Morrell said.

http://www.stripes.com/article.asp?section=104&article=48909


looks very good for FRPT imho
cheers
Oliver

FRPT: Friedman Starts @ Mkt Perform; Sets Tgt @ $18; Analyst Notes
Friday , September 21, 2007 08:30ET
Issuer: Force Protection, Inc (NasdaqSC: FRPT)
Analyst Firm:  Friedman Billings Ramsey Group Inc.
Ratings Action: INITIATE
Current Rating: Mkt Perform
Target Price Action: INITIATE
Target Price: $18.00

Analyst Comments: As a leading manufacturer of Mine Resistant Ambush Protected (MRAP) Vehicles, the company is well positioned to benefit from what has become the highest acquisition priority of the Department of Defense (DOD); however, the firm thinks that near-term production expectations are too high given emerging DOD funding issues. Their Our 2007 revenue and earnings estimates are $629.1 million and 60c, respectively.

&

FBR Research - FRPT: Navigating the Minefield--Initiating Coverage with a Market
Perform (Note)

Yesterday, we initiated coverage of Force Protection, Inc. (FRPT) with a Market Perform rating and a 12-month, DCF-derived price target of $18.00 per share. As a leading manufacturer of Mine-Resistant Ambush-Protected (MRAP) vehicles, the company is well positioned to benefit from what has become the highest acquisition priority of the Department of Defense (DOD); however, we think that near-term production expectations are too high, given emerging DOD funding issues.
* Yesterday, we initiated coverage of Force Protection, Inc. (FRPT) with a Market Perform rating and an $18 price target. Our 2007 revenue and earnings estimates are $629.1 million and $0.60, respectively. Consensus information is limited, but both are lower than current consensus. Our 2008 revenue and EPS estimates of $1.38 billion and $1.49, respectively, are above consensus.

* FRPT is a key supplier of ambush-protected vehicles to the DOD's recently established Mine-Resistant Ambush-Protected (MRAP) program. To date, the company has garnered approximately one-third of all MRAP orders awarded by the DOD.

* We believe that our current expectations for MRAP vehicle deliveries might be conservative since we are below the consensus, which we estimate at anywhere from 17,000 to 24,000 vehicles or more. The Army's requirement could, in fact, eventually exceed 15,000 MRAPs; however, that will be heavily dependent on the operational needs on the ground and the MRAPs' performance in the field.

* Our DCF-derived price target for Force Protection is $18, which implies a 6.2x multiple of our forecasted 2008 EBITDA. Our valuation is predicated on long-term revenue growth of 14.6% and operating income growth of 15.4%.

* We have leveraged the work of FBR's Washington defense policy analyst Scott Ellison in this report.

 
$50 Billion for Military Is Added to Budget
By HELENE COOPER

WASHINGTON, Sept. 22 — The Bush administration plans to increase its 2008 financing request for military operations in Iraq, Afghanistan and elsewhere by almost $50 billion, with about a quarter of the additional money going toward armored trucks built to withstand roadside bombs, Pentagon officials said Saturday.

The increase would bring the amount the administration is seeking to finance the war effort through 2008 to almost $200 billion. Much of that money will go to refurbishment of military equipment and to the purchase of new protective equipment for troops, officials said, an indication of the toll that years of combat in Iraq and Afghanistan have taken on military vehicles, aircraft, weapons and other items.

Defense officials said earlier this year that the Pentagon would need a war budget of $141 billion in the fiscal year beginning Oct. 1. The additional request for nearly $50 billion, which was first reported in The Los Angeles Times on Saturday, will be presented by Defense Secretary Robert M. Gates during a Senate Appropriations Committee hearing on Wednesday, the Pentagon said. Deputy Secretary of State John D. Negroponte and senior military officials are also expected to attend the hearing.

Mr. Gates is to testify two weeks after Gen. David H. Petraeus, the top commander in Iraq, went before Congress to warn against a rapid reduction of troops in Iraq, and a week after a Democratic effort to limit troop rotations stumbled in the Senate. The financing request may serve to further sharpen partisan divisions over the Iraq war in general, and its soaring cost in particular.

About a quarter of the new money would go to build additional mine-resistant, ambush-protected vehicles, or MRAPs, Pentagon officials said. "We'd put in an original request for 7,000 MRAPS, but we're going to double that number," said a senior Defense Department official, who spoke on condition of anonymity because he was not authorized to comment publicly on the issue.

Members of Congress have criticized the Defense Department, saying it has been too slow to buy enough of the vehicles for troops in Iraq.

The vehicles, which cost around $1 million each, have a raised chassis and V-shaped underside that deflects explosions better than the flat underbelly on Humvees, which are used by most combat units in Iraq and Afghanistan.

The Bush administration originally sought $2.6 billion for fiscal 2007 to buy additional MRAPs, but Congress increased the total by $1.2 billion. Acquiring MRAPs has become one of the Pentagon's biggest budget priorities.

Senator Joesph R. Biden Jr., of Delaware, chairman of the Senate Foreign Relations Committee, reintroduced legislation last week to increase financing for the mine-resistant vehicles by $23.6 billion.

"We have no higher obligation than to protect those we send to the front lines," Mr. Biden said in a statement on Wednesday. "So when our commanders in the field tell us that MRAPs will reduce casualties by 67 to 80 percent, it is our responsibility to provide them."

Defense officials, conceding that increasing production of MRAPs so steeply could lead to bottlenecks, have said the Defense Department's leadership now agrees that the risk is acceptable in order to provide vehicles that can better withstand roadside attacks.

Before the Pentagon decided several months ago to buy as many MRAPs as could be made, the vehicles were provided primarily for units with such high-risk missions as clearing roads of bombs, officials said.

Mr. Gates ordered an acceleration in production in May after news reports said Marine units using the vehicles in Anbar Province had experienced a sharp decline in casualties from roadside bombs.

http://www.nytimes.com/2007/09/23/washington/23spend.html?_r=2&adxnnl=0&oref=slogin&adxnnlx=1190568300-nmSTBssOmh0QtCUOt5lOHQ&pagewanted=print&oref=slogin

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Defense update article:

http://www.defense-update.com/features/du-3-07/feature_mrap.htm

Force Protection Names Two to Board
Monday September 24, 6:30 pm ET
Force Protection Appoints New Director, President

LADSON, S.C. (AP) -- Armored vehicle maker Force Protection Inc. said Monday it appointed both a new director and president.

John S. Day has become a director and Michael Moody, 61, has become president, effective last Tuesday.

Day spent more than 30 years in accounting and served as an audit partner at Arthur Anderson and a director of real estate and financial services at Deloite and Touche LLP. Moody has served as a principal for Westsource Financial Services Inc. and held senior management positions at several companies.

Force Protection shares fell 11 cents to $18.35 in afterhours trading.

la-onda,
Great company! Thanks for bringing it to our attention.

 

I know! it's awesome! I love candlesticks! I guess who doesn't? You must be making a killing.  Great job!

Got back in and started buying at 17.50.

Was confused when the number for next year went from 7700 vehicles to 15000 vehicles, but that is the JROC at DoD proposal. We must still see how congress is going to budget them. So far the proposal before congress is 1/4 of 47 billion for MRAP vehicles. Then there is Biden's 25 billion dollar proposal which gets debated today.

Lastly will they pass the budget by October or will they pass a bridge measure and fund them as they continue their debate of the Fiscal Budget. The next week may tell.

The good news FRPT and NAVZ are the only two in good standing delivering vehicles ready for more contracts. I hope it is first come first served like last year. Then maybe a slide when the competition gets their contracts.

19.57!!