L-3 loses Army linguistics deal, revises '07 financial guidance

L-3 Communications Corp. downgraded its financial projections today after it lost a major language translation services contract it held for the Army's Intelligence and Security Command. The contract renewal is valued at a maximum of $4.6 billion over five years.

The Army awarded the contract to Global Linguistic Solutions LLC, a joint venture formed by DynCorp International of Falls Church, Va., and McNeil Technologies of Springfield, Va. Full contract performance will begin in March 2007. DynCorp is the managing partner of the joint venture, with a 51 percent ownership interest.

L-3 of New York was the incumbent contractor for the management of translation and interpretation services in support of U.S. military operations in Iraq, Afghanistan and detention facilities at Guantanamo Bay, Cuba. The contract, which expires in March 2007, was assumed by L-3 as part of its acquisition of the Titan Corp. in July 2005.

"While the company is disappointed about the loss of the contract, we maintain our full support and confidence in our exceptional employees who have made the current worldwide linguist contract a success," L-3 Chief Executive Michael T. Strianese said in a statement.

L-3 trimmed its revenue forecast to between $12.9 billion and $13.1 billion, from $13.4 to $13.6 billion. "Despite the loss, L-3 remains well positioned for profitable growth in 2007 and beyond," the company said in a statement.

L-3, which had federal revenues of $1.8 billion in 2005, ranks No. 7 on Washington Technology's 2006 Top 100 list of the largest federal IT contractors.

Under the contract, the DynCorp/McNeil joint venture will employ up to 6,000 locally hired translators and as many as 1,000 U.S. citizens with security clearances who are native speakers of languages spoken in Iraq, the company said in a statement. DynCorp currently has 2,500 employees in Iraq, including linguists.

McNeil has experience with recruiting and deploying linguists, and also helped design, implement and operate the Federal Deployment Centers at Ft. Belvoir, Va., and Kuwait City, which deployed more than 10,000 individuals to support the Coalition Provisional Authority in Iraq.

The joint venture will be headed by retired Army Maj. Gen. James "Spider" Marks, who was in charge of an Iraq language program in 2003 as chief of intelligence for the coalition forces land component command. The vice president is Michael Simone, former commandant of the Defense Language Institute.

"The ability to communicate effectively with the Iraqi people is critical to a successful outcome in Iraq, and we are very aware of the trust that has been placed in us," DynCorp CEO Herbert J. Lanese said in a statement. "McNeil and DynCorp International are a formidable team to carry out this mission. Our two companies have strong track records in supporting our armed forces, and we have combined our capabilities in a way that will give our troops the mission support they need."

DynCorp has about 14,000 employees and had revenues of $2 billion in fiscal 2006. McNeil has about 1,300 employees.