TOP 100: No. 2

Northrop targets international markets for future opportunities

Northrop Grumman Corp. plans to go global big-time.

While the budget deal signed last December by President Obama will give the government contracting market a measure of stability over the next two years, what happens after that is unclear. Northrop Grumman officials want to be well-positioned for any post-2015 disarray in federal spending by expanding their business in the international public-sector market.

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The company is ranked No. 2 on the Top 100 with $6.9 billion in prime contracts in fiscal 2013.

Kathy Warden, president of Northrop Grumman’s Information Systems division, said that the company’s leadership expects a “significant portion” of its growth to be in the international space.

“It really is an area of opportunity for Northrop Grumman,” said Kathy Warden, president of the company’s Information Systems division. “We have not historically done as much international business as some of our peer competitors. That actually creates a greater opportunity for us at this point because the market for our services and systems is pent-up demand globally. That’s what we’re finding as we go into the international market.”

The company is concentrating its efforts on government markets in Australia, Japan, South Korea, Asia, Saudi Arabia and the United Arab Emirates, and the United Kingdom and U.S. European allies, Warden said.

Last July, Northrop Grumman signed an agreement with London’s Metropolitan Police Service (MPS) to provide its CommandPoint application as the core of MPS’s new command and control system, which is expected to go live next year. The company is also the prime contractor and systems integrator for the design, installation and maintenance of biometric identification and fingerprint database service for the police across England, Wales, Scotland and Northern Ireland.

Two years ago, Northrop Grumman acquired M5 Network Security, an Australia-based supplier of cybersecurity, secure mobile communications products and advanced analytics to Australian military and intelligence organizations.

“We look for this not to be just a one-year phenomena with a couple of contract wins but a trend and long-term path forward to growing our international presence,” Warden said.

Aside from its global efforts, Northrop Grumman officials plan to continue to focus on growth in its four pillars of expertise—cybersecurity, C4ISR, unmanned systems and logistics.  In particular, they see burgeoning opportunities in the cyber sector.

Last February, Northrop Grumman was awarded a contract by the Homeland Security Department to provide operational services to the U.S. Computer Emergency Readiness Team (US-CERT), a franchise DHS program responsible for analyzing and reducing cyber threats and for coordinating incident response undertakings across all levels of government and the private sector. The single-award, IDIQ contract was for five years and valued at up to $350 million.

“We continue to grow and expand our business in the intelligence and defense community around our cyber portfolio,” said Warden, who became president of Information Systems in January 2013 after serving as vice president and general manager of the cyber intelligence division within the IS sector.

Warden was buoyant about her first 16 months as Information Systems chief, citing the hard work and intense focus it took to negotiate the federal budget turmoil of 2013.

The rough budget environment “gave us a platform to demonstrate our commitments to our customers, our employees and our suppliers, and we did just that,” she said. “We received numerous awards, we won new business, entered new markets, grew in the areas we set out to grow and delivered best in class financial performance to our shareholders, all at the same time. So I feel extremely pleased with what the team has accomplished.”

Overall, there is a sense of optimism at Northrop Grumman about the future of the government contracting market, despite budget uncertainties that may loom after 2015.

“As we look at long-term contracting in the federal market, we are also expecting that the desire for affordable solutions is going to remain a positive outcome of what we’re experiencing in the budget downturn, so companies that can innovate and respond quickly to customer needs will be those that prevail,” Warden said.

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