Lockheed Martin Wins $1.5 Billion Contract

By Nick Wakeman, Senior Editor

Lockheed Martin Corp. relied on Internet and electronic commerce solutions in its winning bid to modernize the Air Force's air, missile and space command and control systems.

Under the $1.5 billion, 15-year contract, awarded Sept. 20, Lockheed Martin will consolidate about 40 command control systems that are used by the North American Aerospace Defense Command and the U.S. Space Command.

The contract will develop a common, interoperable information technology infrastructure. The modernization effort affects air, missile and space command and control systems, and will provide a common operational picture of the global battlefield with real-time data.

The Internet and electronic commerce technologies planned for the effort ? called the Integrated Space Command and Control program ? will provide an architecture that allows the command and control systems to grow and adapt as technologies change, said Terry Drabant, president of Lockheed Martin Mission Systems, which is leading the effort.

"This isn't so much about the solution you have today, but the need for an architecture that evolves over time," he said.

Lockheed Martin of Bethesda, Md., will be relying on commercially available software and products to integrate the various command and control systems. The company's core team includes the Boeing Co. of Seattle, Aerojet of Sacramento, Calif., DynCorp of Reston, Va., Verizon Communications of New York and Wang Government Services Inc. of McLean, Va.

Other members of the team are Computer Sciences Corp. of El Segundo, Calif., Logicon Inc. of Herndon, Va., and Autometric Inc. of Springfield, Va.

To bring in elements of business-to-business e-commerce and Internet technologies, Lockheed Martin has tapped companies such as Microsoft Corp. of Redmond, Wash., Cisco Systems Inc. of San Jose, Calif., Oracle Corp. of Redwood Shores, Calif., AT&T Corp. of Basking Ridge, N.J., Neon Software Inc. of Lafayette, Calif., and BEA Systems Inc. of San Jose.

Commercially available products have become so robust and secure that they can be adapted to and support military applications, Drabant said.

"The stock market is an example of a command and control system," Drabant said, pointing to NASDAQ's requirement for reliable stock transactions. Users need access to information in real time. They have to know who is sending and who is receiving information. And there has to be control over who has access to certain information.

The win comes at a good time for Lockheed Martin, which is slowly unloading a heavy burden of debt and solving problems managing its far-flung operations.

With $25.5 billion in 1999 revenue, this $100 million-a-year project likely will have little effect on Lockheed Martin's profitability, but the win says a lot about the company, said Paul Nisbet, an analyst with the investment banking firm JSA Research Inc. of Newport, R.I.

"This keeps them at the forefront of communications," Nisbet said. "They certainly consider this a very important program."

To win the project, Lockheed Martin defeated a team let by TRW Inc. of Cleveland. Each team had been awarded a contract earlier this year to develop a proof of concept, which helped determine the final winner.

In a statement, TRW expressed disappointment that its team did not win the bid.

"We'll know more about the selection specifics after the government debrief and learn more about the areas we can strengthen to help TRW win future bids in the command and control arena," the statement said.

In the competition, the Air Force adopted a different approach from the traditional bid and proposal process that relies heavily on written proposals. Instead, the Air Force relied on oral presentations and other procedures that fostered more interaction and dialogue between the contractors and the Air Force.

"It wasn't easier, but the Air Force gets much better insight," Drabant said. "I think there will be more of this."

The interaction during the bidding process helps build a closer working relationship between the customer and the contractor, which is important in large, complex projects, he said.

For the Air Force project, Lockheed Martin will be using what the company calls a "spiral development methodology," which means that the system will be rolled out in stages, with each stage building on the one before it, Drabant said.

"It will take six or seven years to get our architecture deployed," he said. But Air Force users will see improvements each year.

One reason that the deployment takes time is that the current command and control systems have to continue to operate with no downtime or loss of capability.

"It's like changing the frame in a car while it's moving at 50 miles an hour," Drabant said.