Building electronic submarine detection devices for the U.S. Navy has allowed Sparton Corp. to develop a revenue-enhancing niche service.
EMS provider Sparton, Jackson, Mich., since 1956 has built extendible acoustic equipment, called sonobuoys, that the U.S. Navy and other naval fleets use to track and find enemy submarines.
Last week, Sparton was awarded two U.S. Navy contracts, valued at $22.6 million, to make 33,116 sonobuoys, said president and chief executive David Hockenbrocht. The EMS provider, which last year tallied sales of $187.6 million, relies on sonobuoys for 20% of its revenue.
Sparton won a competitive bid to make Q-62F active and Q-53F passive sonobuoys, which are dropped into the water from military aircraft. The equipment helps naval fleets determine how close their boats are to potential danger, Hockenbrocht said.
"It was a good win for us," he said. "We're one of [only a handful] of companies that make sonobuoys."
Part of the reason for that is the sonobuoy market's "high barrier to entry," Hockenbrocht said. "You have to be technically competent to work with underwater equipment and you have to be considered a qualified producer [by various government agencies]."
The two new contracts will assist Sparton's continued work in the design, development, and manufacture of target detection devices, acoustic underwater transducers, and sonar navigation aides, he said.
Sparton will make the U.S. Navy's sonobuoys at its DeLeon Springs, Fla., plant, and expects to complete the project by February 2004.