Lockheed Martin Corporation (LMT) has received an indefinite delivery, indefinite quantity contract worth $146 million from the U.S. Army. Per the contract, Lockheed will design an advanced Joint Land Component Constructive Training Capability (:JLCCTC) system. The contract period spans for more than five years.
The JLCCTC is a modeling and simulation software capability that provides an appropriate level of model and simulation resolution to support the Army. This system prepares dummy operational scenarios, thereby preparing and positioning commanders and their staff to direct military operations.
This system puts together seven current command and battle staff training tools into a single system. Then it presents fake enemy forces in front of commanders. Such exercises help sharpen decision-making skills during high pressure military missions. This simulation-based training system will prepare Army, joint and coalition leaders to act in the evolving operational environment with conviction.
Also, Lockheed has developed the Warfighter's Simulation (:WARSIM) component of JLCCTC. WARSIM as a part of JLCCTC is a group of software and hardware that simulates the complex interactions of the battlefield. In order to create a realistic training environment, it assimilates ground, air, ballistic missile and intelligence models with mission command systems.
In 2012, WARSIM supported 14 training exercises and trained more than 22,000 commanders, their staffs and units. Lockheed's skilled industry team has experience with all components that are involved in the system. Going forward, Lockheed’s expertise in this area would bring in more such training contracts for the company.
Based in Bethesda, MD, Lockheed Martin is a global security and aerospace company principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. Lockheed remains a key player within the military space and is expected to register a stable performance due to a leveraged presence in the Army, Air Force, Navy and IT programs.
However, defense cutbacks on high-cost platform programs and over-exposure to the Department of Defense budget remain a matter of concern for Lockheed as well as other industry players like General Dynamics Corporation (GD) and The Boeing Company (BA). The company presently retains a short-term Zacks Rank #3 (Hold).
In the near term, we would advise investors to accumulate its short-term Zacks Rank #2 (Buy) peer Wesco Aircraft Holdings, Inc. (WAIR).
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