V2X has won a seven-year, $440 million U.S. Navy award under its legacy company Vertex to deliver aircraft maintenance services to the Naval Test Wing Pacific VX-30 and VX-31 at two California locations.
Services to be provided under the award include maintenance, logistics and technical support for the weapons development and test squadrons at Point Mugu and China Lake, V2X announced from its McLean, Virginia headquarters on Wednesday.
“V2X is honored to be selected to support the critical test and evaluation activities performed at Naval Test Wing Pacific. Our established history and record of performance providing maintenance, repair, overhaul and technical support for a variety of Naval Aviation platforms demonstrate our commitment to maintaining high levels of mission readiness,” said Chuck Prow, V2X CEO and nine-time Wash100 Award winner
The NTWP’s goal is to support the Department of the Navy by providing safe, effective and efficient ground and flight test, airborne flight test assistance and experimental operations of manned and unmanned aircraft, weapons and weapons systems. This contract will aid the Naval Air Systems Command in its mission to develop, assess and sustain the service branch’s current array of capabilities.
Contracting activities are expected to conclude in March 2030.
Recently, V2X won multiple awards to support various military branches. In February, the enterprise secured a $265 million contract modification within the Army’s Enhanced Army Global Logistic Enterprise program, under which V2X’s provision of logistics support services at Fort Benning in Georgia was extended.
While still operating as Vertex, V2X won a spot on a potential 10-year, $900 million Air Force contract awarded in December 2022. As one of 92 companies on the contract, V2X is currently helping the service branch identify new methods to progress the development of multidomain systems while characterizing novel systems and technologies through research and demonstrations, conducting rapid prototyping and delivering test and capability transition aid.
Shatara Garrett was hired into V2X, the company formed by the merger of Vectrus and Vertex in the summer of 2022, as a supply technician who inventoried material and equipment, from pencils to tires. She was promoted to Logistics Manager, where she managed two programs with over fifty sites.
She says that when she was first hired, she asked for an accommodation. “I asked for time to answer questions and to allow me to stand and move around and not have my back facing the door.” She adds that V2X can help people with seen or unseen disabilities by listening and learning about these different types of disabilities.
She explains, “The feeling of acceptance is most satisfying to me. I struggle with meeting new people in person and positioning myself in a room to feel comfortable. Working with people that ask me how I am doing and if they can help in any way helps me tremendously.”
Garrett came to the company with a bachelor’s degree in business with a supply chain certificate and spent six years in the military as a supply sergeant. “My background helped me acquire the position I have now.” It was the military that helped her in finding a job, writing her resume, and coaching for interviews. She was originally hired into Raytheon and transitioned into Vertex, which then became part of V2X. “I heard about the company through recruiters at a job fair and loved the benefit program and the ability to still work with soldiers.”
Currently, Garrett is Logistics/Fleet Manager and Compliance Officerat V2X, a leading provider of critical mission solutions and support to defense clients globally. The logistics portion of her job she uses V2X’s asset management tool for its programs. For the fleet section of her job, she is the liaison for the 153 outsourced fleet companies and oversees the purchase and maintenance of vehicles. She also does internal audits on programs and subcontractors to make sure they remain in compliance with government regulations.
Her role now is a managerial one but she recalls, “When I was in a technical role for logistics, I studied to get my certifications from the National Property Management Association (NPMA) while taking college courses for my bachelor’s degree.” She says that having both helped her advance in her career at V2X.
Find open positions at McLean, Virginia-based V2X at www. https://gov2x.com/careers/ and connect with V2X on LinkedIn.
The global government services company is eight months into the combination of Vectrus and Vertex and sees opportunities for its new broader capabilities.
Mergers and acquisitions involving government contractors create changes that can be felt and seen by the federal agency customer, beyond the new name and logo.
Roughly two weeks before V2X’s fourth quarter earnings call Thursday, its chief executive spent an entire week with clients across the Indo-Pacific Command’s region of responsibility. Chuck Prow’s primary purpose was to talk about the new company formed in July 2022 out of Vectrus and Vertex.
“Our clients fully understand the breadth and the important addition of all of these capabilities to the portfolio,” Prow told investors on the call. “It helps us both from a contingency requirement perspective, but it also helps us in terms of a breadth and a scale perspective, when our clients are looking to increase their op tempo, if you will, in regions that are as broad and as vast as IndoPACOM.”
That concept of “op tempo” means the rate at which armed forces units participate in military exercises such as contingency operations, exercises and training deployments.
Both a cursory look at IndoPACOM’s map and consideration of current geopolitics should help show why that region is evidently picking up in activity as Prow observed.
IndoPACOM supports the Defense Department’s “Pacific Deterrence Initiative,” which has $11.5 billion in authorized funding this fiscal year to enhance the U.S.’ posture in that region where China is also located. The PDI’s other main goal is to help U.S. allies in that region build up their defenses.
The IndoPACOM region is also where V2X has “strategically invested to boost its core set of capabilities and converged solutions” over the past five years, Prow told analysts. V2X’s services there also involve electronic security systems, sensors, radar upgrades, systems engineering and communication support.
But that is not the only area that V2X is bullish on with respect to its pipeline and positioning now that the two companies have joined forces.
One big aspect of the rationale behind V2X’s creation was to form a larger provider of government services that cut across both digital and physical assets, or what the company calls converged infrastructure. That concept puts technology as a centerpiece of services in support of operations, logistics, aerospace and training programs among others.
Prow put these numbers to what the merger has created in terms of the combined workforce:
“We have an emerging advanced technology business with 1,000-plus engineers, 500 specialty engineers, where we really like the pipeline that’s emerging behind our advanced technology business.”
V2X reported 2022 pro forma revenue of $3.67 billion and profit of $278 million, figures that reflect the combined contributions of Vectrus and Vertex during the full year. Those represent year-over-year pro forma increases of 8.8% on the top line and 7.6% in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization).
The company’s initial guidance for 2023 has pro forma revenue in the range of $3.8 billion-to-$3.9 billion to indicate approximately 5% growth at the midpoint. That outlook also has pro forma adjusted EBITDA in the range of $290 million-to-$310 million to indicate an approximate 8% increase at the midpoint.
Year-end total backlog was $12.3 billion and the funded portion was $2.6 billion.
July 5 represented day one for the newly cast V2X after the merger of Vectrus and Vertex created a larger technical services provider in the government market.
One aspect of the thesis for transactions such as V2X goes like this: growth and enhanced profitability will happen faster and at greater rates after joining forces than would have happened separately.
During V2X’s third quarter earnings call with investors, CEO Chuck Prow said the new company will not have to recompete more than 2% of its revenue over the next two years.
For context: V2X pegs its expected revenue for 2022 at $3.6 billion on a pro forma basis accounting for sales from both Vectrus and Vertex.
A mere 2% of recompeted sales means much of the team’s focus can turn to pursuing the kind of new business it feels better positioned for as a larger entity.
“There’s always recompete in a portfolio that’s as broad as V2X is, it’s pretty smooth when it comes to the size and not being our largest opportunities,” Prow told analysts. “That’s going to free up some time and attention to really focus on and make progress on these net new opportunities that are so attractive to us.”
V2X’s leadership team including Prow knows of what they speak regarding the subject of no longer having a big recompete hurdle to worry about.
What was Vectrus kept the incumbent work that was recompeted in 2019 through the Army’s $82 billion LOGCAP V logistics vehicle. That win also expanded the scope of services on the program for Vectrus and now V2X.
The now McLean, Virginia-headquartered V2X reported a total backlog of $13.6 billion as of the third quarter’s end: a number representing around 3 times this year’s pro forma sales and showing the room given for focusing on new opportunities.
Regarding those new business pursuits in the short-term, Prow cited NASA and the intelligence community as showing opportunities “that are very interesting to us” over the next six-to-18 months.
The National Science Foundation, U.S. Agency for International Development and State Department are on V2X’s list of agencies with longer-term opportunities to watch out for. Prow said those are more in the 18-to-30 month horizon.
On the integration front: V2X plans to enter 2023 with three operational business units of advanced technology, aerospace, and global mission training and support services. January 2024 is when V2X expects to be fully integrated and have realized its goal of $20 million in cost synergies from the merger.
Coronado, Calif. — Rear Adm. Brad Rosen, commander, Navy Region Southwest, toured Naval Supply Systems Command’s (NAVSUP) Fleet Logistics Center (FLC) San Diego 5G smart warehouse located on Naval Air Station North Island Sept. 8.
“The 5G smart warehouse will considerably reduce processing times and fewer errors will be made. There’s huge opportunities here to harvest,” opened Capt. Cory Schemm, commanding officer, NAVSUP FLC San Diego. “You have to elevate your gaze a little to see the full potential and value capture opportunities. This will end up decreasing the resources spent in getting parts where they need to be in a more timely and accountable manner.”
This 5G smart warehouse is the first prototype assigned to the Navy to enhance and digitalize warehouse processes by leveraging state-of-the-art 5G-enabled technology. The project kicked off in December 2020 in a three-phase (12 months per phase) approach.
The visitors were shown demonstrations of each section of the warehouse starting with receiving naval aviation customer requests and ending with parts leaving the warehouse. The demonstrations showcased how the 5G network and technology will streamline parts coming and leaving the warehouse. An RFID tag will be attributed to each package in the warehouse, tracking its movements whether it be on the shelves or moving to where it needs to be via autonomous mobile robots.
With 5G, the smart warehouse has access to the latest wireless technology, offering multi-gigabit speeds with ultra-low latency. This secure wireless transport will help provide faster processing times for tagging packages, as well as being able to find them on the shelves.
“Smart storage aids, like the newly installed vertical lift modules, will decrease pick/stow inaccuracies while allowing NAVSUP FLC San Diego to decrease storage footprints by almost 90% and increasing storage capabilities by 77%” explained Steven Burrill, Naval Base Coronado 5G smart warehouse logistics program lead, NAVSUP FLC San Diego.
The working integrated product team is comprised of engineers and scientists from Naval Information Warfare Center Pacific and a program manager and supply systems analyst from NAVUSP FLC San Diego. Together, they are collaborating with Vectrus to integrate 5G enabled technologies and software application into the warehouse. In addition, the WIPT have been in discussions with Defense Logistics Agency and industry partners to apply automation lessons learned in Navy warehouses.
“Many of those warehouses are just now exploring 5G enabled automation, meaning the Navy is actually at the forefront of automation via 5G. Implementing 5G technology offers improved performance and security that existing warehouses cannot leverage with existing technology, like Wi-Fi” continued Burrill. “Preliminary performance testing of the 5G network recorded throughput values exceeding four GB per second, four times the capability of most commercial Wi-Fi networks.”
“Our project will essentially digitalize a piece of the end-to-end supply chain’’ said Burrill “effectively enhancing Naval Sustainment System-Supply efforts while improving audit compliance across the board.”
NAVSUP FLC San Diego is one of eight FLCs under Commander, NAVSUP. Headquartered in Mechanicsburg, Pennsylvania, NAVSUP employs a diverse, worldwide workforce of more than 25,000 military and civilian personnel. NAVSUP and the Navy Supply Corps conduct and enable supply chain, acquisition, operational logistics and Sailor & family care activities with our mission partners to generate readiness and sustain naval forces worldwide to prevent and decisively win wars. Learn more at www.navsup.navy.mil, www.facebook.com/navsup and https://twitter.com/navsupsyscom.
American Vectrus which currently has the base maintenance contract at Pituffik has continued the apprenticeship program. Currently, there are 12 apprentices from Greenland on base. Two of them are Aima Qvist and Aqqaluk Fleischer, who both want to work at the base when they conclude their education.
Since 2017 the American company Vectrus’ flag has been flown over Pituffik. The company took over the Base Maintenance Contract after Greenland Contractors and chose to continue the apprentice program on base.
At the moment there are 12 apprentices on base that have very different educational backgrounds. In addition, there is one apprentice from the service economics education. The young apprentices come from all over Greenland and after an apprenticeship at Pituffik, they have good chance to land a job at Pituffik or other places in Greenland. This is stated by Margrethe Poulsen, the Apprentice Supervisor at Pituffik.
A busy workday
One of the apprentices that are at base is Aima Qvist, who was born in Uummannaq, but attends school in Nuuk. “It is wonderful to be at Pituffik as there is much to do here, and we are never bored. We work a lot and generally keep busy. The best part is to have fun colleagues and that means you feel very comfortable at your job. I learn a lot, and everybody helps each other.”
Aima Qvist will graduate as an auto mechanic in 2024, and afterward, she would like to stay at Pituffik:
“People at Pituffik is very friendly, smile a lot, and remember to greet each other when they meet. No matter where you are if there are people there, they will greet you. On weekends it is great fun to hang out with your friends. We rent cars and drive around the base and surrounding area. We can feel that the dark time with very little sun is drawing near. Even though we have the same in Uummannaq, I could feel it here too. You can get tired, but because the workplace is great, it is still a good place to be.”
Aqqaluk Fleischer is also from Uummannaq. He studies Service Economics at Campus Kujalleq but is at Pituffik for a 12-week apprenticeship.
“I think the apprenticeship has been very successful, in which I have taken part in many different tasks and made a difference. Another thing is the fact that it is peaceful here, and as a Greenlandic speaker, you get to use both Danish and English in your daily work. I really want to come back and work at the base at a point in the future.”
“The best thing is that I have had the chance of communicating with both civil and military personnel. That way, I have now had multiple experiences with cultural differences, because that was challenging in the beginning. It was also challenging to work 10.5 hours a day on average. But you get used to it, and you have to have the ability to adapt to new surroundings says Aqqaluk Fleischer.
Right now, the Base Maintenance Contract is in solicitation, and the next contract will likely run for a longer period from 2022 and all the way to 2027 with the possibility for a 5-year and subsequently a 2-year option period.
Vectrus has not been eligible to make its bid for the base Maintenance Contract as the rules have been changed in the meantime so that companies that place a bid have to be anchored in Greenland. For that same reason, Vectrus has teamed up with the Greenlandic contracting company Permagreen and formed the company Inuksuk A/S which is among the companies that have placed a bid on the new contract. Another one of those companies is Greenland Contractors and Greenland Holding.
A decision regarding the Base Maintenance Contract is expected very soon.