Contract watch

Early wins get new Raytheon training unit off to quick start.

Big winners in the past few weeks have been
Lockheed Martin Corp. and
soldiers in one Army combat
team ? in dollars and pounds,
respectively. But a couple of
wins by one Raytheon Co.
division portend significant
advances into the multibillion-
dollar annual training
market.

Lockheed nailed down a
10-year, $5.6 billion contract from the
Defense Logistics Agency to oversee inventory
and distribution of automotive parts for
all U.S. military ground vehicles and will lead
a team that will be providing services at the
Energy Department's Hanford Site under a
10-year, $3 billion contract.

Soldiers in one Stryker Brigade Combat
team will drop nearly 10 pounds each. Under
a $70 million contract, General Dynamics
Corp. will supply its new version of the Land
Warrior fighting system, which reduces the
weight warfighters carry from 17 pounds to
7.2 pounds.

TREND WATCH

Raytheon's new Global Training Solutions
unit ? part of Raytheon Technical Services
Co. LLC of Reston, Va. ? is paying off fast.
The two-month-old GTS helped Raytheon
nab two training contracts worth as much as
$480 million over five years.

In August, it snagged a spot on the Navy's
five-year, $43 million, multiple-award, indefinite-
delivery, indefinite-quantity
contract to provide
education and training solutions
for the Naval
Education and Training
Professional Development
and Technology Center.
However, the big win was
the $437 million award from
the Federal Aviation
Administration for the first five years of its
Air Traffic Control Optimum Training Solution,
said Stephen Teel, the RTSC senior vice president
leading the new training unit. Raytheon
snatched the award from incumbents
Washington Consulting Group and University
of Oklahoma.

GTS, which consolidates best practices and
lessons learned from training efforts companywide,
is structured to make that happen,
Teel said. "The domain is important, but if we
have a training methodology for designing,
developing and optimizing training solutions,
we believe it can be applied to any domain."

Raytheon trains groups as disparate as
NASA astronauts at Johnson Space Center in
Houston and mechanics for General Motors
Co.'s Mr. Goodwrench business. Last year, the
company edged out General Dynamics on a
10-year, $11.2 billion training contract from the
Army.

In 2007, training services contributed
$555 million ? or 2.6 percent of Raytheon's
$21.3 billion income. Teel declined to share
strategic ambitions and growth-rate goals, but
said, "We are looking at significant growth."

MORE TO COME

It's a growing market, especially in government,
said Josh Bersin, president of training
researcher Bersin and Associates.

"Corporate training spending grew at
around 4 percent in 2007 and is growing at
a slower rate in 2008," he said. Annual
spending went from $55.8 billion in 2006 to
$58.5 billion in 2007.

"We believe that federal agency spending is
growing at a slightly greater rate than corporate
spending due largely to growth in federal
budgets and federal headcount," Bersin said.
With validation for the new training unit
returned so quickly, Raytheon will aggressively
seek out new business, Teel said.

"We've
got a long legacy in communications and the
government marketplace," he said. "We're
looking at a broad list of opportunities with
different customers."

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