Communications work fuels Harris' growth

Harris braces for a market with fewer large contracts but expects to grow because of the range of its technology expertise.

In 2009, Harris Corp. was looking at a dismal U.S. economic outlook, a new administration, a planned drawdown in Iraq and uncertainty about activity in Afghanistan. So the success Harris anticipated was tempered by some uncertainty.

In the end, "we had a tremendous year based on where we thought it would be a year ago at this time," said Ted Hengst, president of Harris IT Services.

The company ranks No. 13 on this year’s list of Top 100 prime federal contractors, with prime contracting revenue of $2.2 billion in fiscal 2009. Much of that success has been driven by the company's RF Communications unit in Rochester, N.Y., which supplies next-generation Falcon III radios to keep warfighters connected in mine-resistant, ambush-protected vehicles and in foxholes in Iraq and Afghanistan.

Harris' satellite wins were also critical, including GOES-R, the Geostationary Operational Environmental Satellite-Series R Ground Segment program for the National Oceanic and Atmospheric Administration, which is worth a potential $736 million, and the Army's Modernization of Enterprise Terminals to deploy next-generation military satellite communications terminals, worth as much as $600 million.

Major Harris IT Services awards included a $196 million installation, training, help-desk and information technology services contract to support 270 domestic and international consular operations.

Harris IT Services also leads a team that is responsible for the communications systems migration and consolidation for nine Southern Command buildings that are moving into a new facility. That work will position Harris favorably as it bids for future Base Realignment and Closure moves, such as the relocation of the Defense Information Systems Agency headquarters to Fort Meade, Md.

However, the future could hold fewer large IT contracts for the company.

"The pendulum is swinging back to very large contracts breaking up," Hengst said, including the recompete of the Air Force Network Centric Solutions contract as eight pieces instead of one and the Navy Marine Corps Intranet program, also anticipated to be divided.

"A large project today is $500 million to $1 billion,” he said. “Maybe then, $50 [million] to $100 million becomes a large project. You have to reset your mind and your growth pattern." Harris' growth last year was also fueled by acquisitions, including Tyco Electronics Wireless Systems, renamed Harris Public Safety and Professional Communications; OSI Geospatial Inc.'s land-based situational awareness business; and the air traffic control business unit of SolaCom Technologies Inc.

In May, the company announced two more acqiusitions, a $525 million deal for CapRock Communications that bolsters internet-related communications capabilities, and a deal for SignaCert to add more cybersecurity offerings. Terms of that deal were not disclosed.

The Melbourne, Fla., company will extend its activity in areas such as health care and security. It received a $72 million contract from the Veterans Affairs Department to improve billing and collection, and it is the prime contractor on the Nationwide Health Information Network Connect contract. To boslster its health care offerings it acquired Patriot Technologies LLC, a provider of health care IT, imaging and enterprise software.

In cybersecurity, Harris is training and adding staff and, in 2009, acquired Crucial Security Inc., whose products address offensive and defensive IT challenges.

Harris also wants to apply its well-honed radio expertise by offering systems that will compete in the mobile market. In addition, the company intends to make use of its commercial broadcast skills by helping the government accommodate expanding use of video.

As defense and civil agencies become more solutions-focused, Harris is adapting to their needs, Hengst said. "We used to act like four separate divisions. But now we see the ability to bring technology, techniques and [intellectual property] from other parts of the corporation to create solutions that are more in keeping with how government customers buy today. They do not want to be putting pieces together."

However, they need to do so within the confines of increasingly tight budgets, and government customers are looking to IT to reduce costs, he said.

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