Newly restructured BAE Systems aims at broader solutions

With its portfolio approach in place, the company focuses on customers

BAE Systems Inc. entered 2009 newly restructured to meet the cross-functional challenges that government customers face.

The company also entered the year with about $2 billion in 2008 federal prime contracting, helping it rank No. 14 on the Top 100.

As part of the restructuring effort, which coincided with the appointment last fall of Ian King as chief executive officer, BAE Systems plc formed four operating units. Those include the U.S.-based Electronics, Intelligence and Support Operating Group, which contains the Information Solutions division, led by its president, Gene Glazar.

“The intent is to do something customers are saying is happening in their space, aggregating capabilities and talent for specific customer missions and mission-critical environments,” said Glazar, former vice president of business development at BAE Systems’ Customer Solutions Group. “We’ve combined major parts of the business into a portfolio and moved resources closer to the customer,” including systems engineering, program management and information technology asset management and capabilities.

The new alignment will help BAE compete better for complete solutions, from research and development and high-end solution engineering to long-term infrastructure support, Glazar said. “It’s moved us from working from within segments toward working on the entire portfolio and makes us more competitive.”

“BAE is a collection of a lot of acquisitions, so there are always a lot of integration opportunities, particularly after they’ve spent some time looking directionally in the way the budget is heading,” said Peter Arment, managing director of Broadpoint AmTech, an information technology and defense research and analysis company.

“We view this as a positive move," he said. "We’ve seen that the overall demand for IT is going to remain very heavy despite some in-sourcing threats within the government."

BAE Systems already has won significant IT-related contracts across a range of government agencies, including the Treasury and Homeland Security departments, the Federal Emergency Management Agency, and the military services and intelligence agencies.

Significant 2008 awards included an $8.5 million contract from the Defense Advanced Research Projects Agency’s Intrinsically Assurable Mobile Ad hoc Network program to develop an intrinsically secure mobile military communications network designed to protect against cyberattacks.

The company also was selected by the Administrative Office of the U.S. Courts to manage the mailing and electronic distribution of bankruptcy notices for the Bankruptcy Noticing Center.

BAE Systems was one of 14 contractors awarded an indefinite-delivery, indefinite-quantity contract for the Defense Information Systems Agency’s $12.2 billion Encore II Information Technology Solutions program. BAE will provide DISA with network engineering services, systems development engineering and integration, security engineering, and enterprise support.

With the increasing trend toward large IDIQ contracts with multiple awardees, being able to work as a team with other contractors is as important as harnessing talent and resources from across internal business units, Glazar said.

Glazar said managing large portfolios of separate but interdependent systems is a challenge. “How do you make independently developed systems provide active intelligence to systems?" he asked. "How do you close the seams and bring information and knowledge together? That’s the focus in industry and in government, and it’s exacerbated by current financial conditions.”

As president, Glazar is challenged with fostering the cross-organizational mind-set that accompanies the new structure. “It’s getting the organization to think collectively as a single entity within the corporate mission. I believe we’ve made remarkable progress in a short period of time.”

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