BAE Systems Selects Parsons Corporation for Modernization Project at Radford Army Ammunition Plant

Rhea-AI Summary

BAE Systems (LON: BA) has selected Parsons (NYSE: PSN) for a $15.4 million, two-year contract to begin initial designs for modernizing the Alternate Nitrate Ester Manufacturing Facility at the Radford Army Ammunition Plant (RFAAP). This project aims to improve safety, increase operational efficiencies, and prioritize environmental improvements at the World War II-era facilities. BAE Systems Ordnance Systems Inc (OSI) has been operating RFAAP since 2012 and recently secured a contract to operate the Holston Army Ammunition Plant through 2035. The collaboration with Parsons , which is also working on other projects at RFAAP, reinforces BAE Systems' commitment to supporting the U.S. Army's modernization efforts and delivering mission-critical capabilities to warfighters.

Positive

• Secured a $15.4 million contract for modernization project at RFAAP
• Continued operation of RFAAP since 2012
• Recently won contract to operate Holston Army Ammunition Plant through 2035
• Project aims to improve safety and operational efficiencies

Negative

• None.

Insights

Financial Analyst

BAE Systems and Parsons Corporation are teaming up for a $15.4 million modernization project at the Radford Army Ammunition Plant. This collaboration signifies a positive strategic move for both companies, indicating solid relationships and capabilities in executing large-scale defense projects.

From a financial perspective, this contract will potentially enhance revenue streams and bolster investor confidence, particularly for Parsons Corporation (NYSE: PSN), as it continues to solidify its presence in the defense sector. The project aims to improve safety and operational efficiencies, which translates to cost savings in the long run. Investors can view this as a sign of prudent financial management and a focus on sustainable operations.

Moreover, for BAE Systems (LON: BA), extending its operational role at Radford and Holston plants ensures ongoing revenue and strengthens its foothold in the defense manufacturing sector. This project could lead to future contracts, providing a stable income source.

Defense Industry Analyst

This modernization project is part of a broader trend in the defense industry towards upgrading aging infrastructure to meet contemporary standards. By enhancing safety and operational efficiency at the Radford Army Ammunition Plant, BAE Systems and Parsons are positioning themselves as leading innovators in the field. The focus on environmental improvements also aligns with a growing emphasis on sustainable practices within the defense sector, which is increasingly scrutinized for its environmental impact.

Additionally, modernizing facilities like these ensures that production capabilities keep pace with technological advancements, important for maintaining military readiness. For stakeholders, this means that BAE Systems and Parsons are not only addressing current needs but are also future-proofing their operations, which is a positive signal for long-term investment stability.

RADFORD, Va.--(BUSINESS WIRE)-- BAE Systems (LON: BA) has selected Parsons Corporation (NYSE: PSN), a leading national security and global infrastructure company, to begin initial designs for the modernization of the Alternate Nitrate Ester Manufacturing Facility at the Radford Army Ammunition Plant (RFAAP). Under this two-year, $15.4 million contract, Parsons will prepare a series of preliminary design packages for the RFAAP manufacturing facility.

Radford Army Ammunition Plant, propellant provider for the U.S. Department of Defense. (Credit: BAE Systems)

“BAE Systems is strongly engaged in supporting the U.S. Army in modernizing the Radford Army Ammunition Plant,” said John Swift, vice president and general manager of BAE Systems Ordnance Systems Inc (OSI). “Our continued collaboration with Parsons Corporation reinforces our commitment to deliver the Army’s vision for readiness.”

Safety remains at the forefront as BAE Systems OSI continues to modernize World War II-era facilities to deliver mission-critical capabilities to the warfighter. This project will improve the safety of manufacturing areas, increase operational efficiencies, and continue to prioritize environmental improvements.

Parsons Corporation is currently providing design and engineering, permitting, and delivery of the Energetic Waste Incinerator/Contaminated Waste Processor, a safe alternative to open burning at RFAAP. BAE Systems’ legacy of modernizing while manufacturing, supported by Parsons’ experience at RFAAP, will provide the U.S. Army with the expertise to deliver reliable, innovative energetics.

“As a premier design and construction management solutions provider for the Army’s industrial base, we’re proud to be a part of critical work at both Radford and Holston Army Ammunition plants,” said Jon Moretta, president of Engineered Systems for Parsons. “Together with BAE Systems, we will leverage our experience to advance the Army’s efforts to modernize the organic industrial base. This important project will add to the storied history of service with which Radford Army Ammunition Plant has provided our nation for more than 80 years and will help ensure the plant remains ready to support the warfighter.”

BAE Systems OSI has been the operating contractor of the RFAAP since 2012, and, in December 2023, received the contract to continue operating the Holston Army Ammunition Plant in Kingsport, Tennessee, through 2035.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240716270591/en/

Laura McLaughlin, BAE Systems

Mobile: 571-867-1217

Laura.mclaughlin@baesystems.us

www.baesystems.com/US

@BAESystemsInc

Source: BAE Systems

FAQ

What is the value and duration of the contract between BAE Systems and Parsons for the RFAAP modernization project?

BAE Systems awarded Parsons a $15.4 million contract for a two-year period to begin initial designs for modernizing the Alternate Nitrate Ester Manufacturing Facility at the Radford Army Ammunition Plant (RFAAP).

What are the main objectives of the modernization project at RFAAP for BAE Systems (BAESY)?

The main objectives of the modernization project at RFAAP for BAE Systems are to improve the safety of manufacturing areas, increase operational efficiencies, and prioritize environmental improvements at the World War II-era facilities.

How long has BAE Systems been operating the Radford Army Ammunition Plant?

BAE Systems Ordnance Systems Inc (OSI) has been the operating contractor of the Radford Army Ammunition Plant (RFAAP) since 2012.

What other recent contract has BAE Systems secured related to ammunition plants?

In December 2023, BAE Systems secured a contract to continue operating the Holston Army Ammunition Plant in Kingsport, Tennessee, through 2035.