Eren Ozmen’s Sierra Nevada Corp. has won a $13.1 billion contract to build the next Doomsday planes for the U.S. Air Force, a deal that could catapult the company into the major leagues of aerospace-defense industry. The contract is a game-changer for the privately held SNC, which has historically operated in the middle tier of the industry. Ozmen’s ambitious leadership and willingness to take smart risks have been key factors in securing the contract, beating out industry giants like Boeing. SNC’s success in this project could pave the way for further growth and larger contracts in the future.
The project, known as the Survivable Airborne Operations Center contract, presents numerous technical and management challenges for SNC. To win the contract, the Ozmens had to agree to do a minority of the project at a fixed price, taking on the risk of cost overruns themselves. While this arrangement could pose challenges for the company, SNC’s fixed pricing structure will be limited to the production phase, reducing the risk of unexpected costs during the design stage. SNC’s reputation as a “destructive innovator” and willingness to embrace new approaches were key factors in securing the contract.
SNC’s success with the Doomsday project could define the legacy of Eren and Fatih Ozmen, who own 87% of the company and are worth a combined $7.8 billion. The couple, who were born in Turkey and met as graduate students in the U.S., have transformed SNC from a small defense outfit into a major player in the industry. The company’s spinoff, Sierra Space, is working on ambitious space projects, including the development of a space plane and plans for a new space station. Success with the Doomsday project could further elevate SNC’s profile and lead to future growth opportunities.
The Doomsday project involves retrofitting existing Boeing 747-8s to create airborne command posts for top military and political leaders in the event of a national emergency. The project requires advanced technology to ensure constant survival communications and protection from electromagnetic pulses in the event of a nuclear attack. SNC will have to work closely with Boeing, which still owns the design data for the original planes, and adhere to the Air Force’s terms for intellectual property rights. SNC’s ability to adapt to these challenges will be crucial for the project’s success.
SNC has already made progress on the Doomsday project, including constructing hangars and flying the first of the used 747-8s to the new facilities. The company is hoping that success with this high-profile contract will lead to additional opportunities, including competing for the Navy’s version of the Doomsday plane. With a goal of reaching $4 billion in revenue by 2025 and tripling its size by 2030, SNC is poised for significant growth in the aerospace-defense industry. As SNC navigates the challenges of the Doomsday project, its future success will depend on its ability to execute the program on time and on budget while maintaining strong relationships with key industry partners.
