New Deloitte Report Examines Opportunities for Defense Contractors in a Shifting Global Marketplace

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Sep 28, 2010, 09:15 ET

WASHINGTON, Sept. 28 /PRNewswire/ -- Deloitte today released a new report which identifies opportunities for defense contractors operating in today's shifting global marketplace. The report was spurred, in part, by recommendations from the bipartisan Sustainable Defense Task Force regarding how the United States should reduce its deficit by updating the military's current force structure.

The report, "Defense - New Realities, Innovative Response," draws upon the expertise of three senior retired military General Officers who now consult to Deloitte: General (USAF ret) Chuck Wald, Lt. General (USAF ret) Harry Raduege and Lt. General (USA ret) Pete Cuviello. Collectively, these General Officers have a combined background of more than 105 years serving the U.S. Air Force and U.S. Army.

"The security threats the world faces today are more complex and diverse than ever before," said Tom Captain, vice chairman and Deloitte's aerospace & defense (A&D) sector leader. "There is a shift underway in how the U.S. military plans, organizes and equips for battle - along with an increasing pressure to make every defense dollar count. This environment will create opportunities for those contractors that can help the military find improvements that save money, increase flexibility and improve efficiency."

Additionally, the Deloitte report indicates that inflexible, non-modifiable systems will be difficult to justify and unlikely to compete for the Department of Defense (DoD) or international dollars. However, it identifies five key areas for significant growth in the A&D sector, including:

Intelligence, surveillance and reconnaissance (ISR)
Cybersecurity
Government services and IT
Business Process Improvement
Globalization and International Markets

"Bipartisan concerns over the federal deficit will likely have a significant adverse impact on the defense budget, but there are opportunities for contractors to help the military improve during these challenging budget times," said Gen. Wald, director, Deloitte Services LLP. "We believe there will be growth opportunities and that innovative and successful contractors will provide solutions that are affordable, flexible and interoperable in these areas."

Additional key findings from the report focusing specifically on the international arena include:

International markets will often mirror U.S. DoD acquisition strategies, especially where nations are philosophically and doctrinally aligned with the U.S.
The U.S. will encourage like-minded nations to acquire U.S. produced equipment and technology as part of the U.S. strategy to build partner capacity and to fight in coalitions.
A&D industry companies that intend to expand their market share through international sales will require an in depth knowledge of the unique regulatory, cultural and International Traffic in Arms Regulation licensing requirements in the global market.

To access the Deloitte study in full, please visit: www.deloitte.com/us/aerospacedefense/defenserealities .

About Deloitte

As used in this document, "Deloitte" means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.

SOURCE Deloitte