Lockheed plans new health IT acquisition

Lockheed Martin is acquiring Systems Made Simple, a health IT company that just cracked the Washington Technology Top 100 for the first time this year.

But more important than its size is Systems Made Simple’s focus on the health IT market and its strong position on one of the largest health IT contracts in the market.

Systems Made Simple is the top contractor on the Veterans Affairs Transformation Twenty-One Total Technology contract known as T4. Since 2011, the company has pulled in $640.6 million in task orders, according to Deltek. That’s far ahead of other, larger primes on the contract such as Harris IT ($291.5 million in task orders), Booz Allen Hamilton ($266.9 million) and CACI International ($154.1 million).

The five-year T4 contract has a $12 billion ceiling and runs through 2016 and will be a new vehicle in Lockheed’s portfolio.

Systems Made Simple does a significant amount of work with the VA in areas such as health data analytics, data center operations, health data management and health system interoperability, according to Lockheed Martin’s statement.

Lockheed also sees VA as an important customer and is building an IT-enabled disability case management services system for veterans through its QTC business.

Once the transaction closes – in about 30 days – Systems Made Simple will become part of Lockheed Martin’s Information Systems & Global Solutions business.

“Systems Made Simple’s capabilities in engineering health technology solutions are a natural extension of our existing health IT portfolio, and will enable us to deliver a broader portfolio of capabilities to meet our health care customers’ current and future needs,” said Marillyn Hewson, chairman and CEO of Lockheed Martin.

Terms of the deal were not disclosed.

With the acquisition, Lockheed Martin will pick up 500 employees.

While Lockheed Martin remains firmly entrenched as the largest IT provider to the federal government, it continues to make acquisitions, but the focus has been more on adding capabilities or access to new markets than increasing size.

In April, the company acquired Industrial Defender, a cyber company focused on the oil and gas, utility and chemical industries. The company only had 130 employees, but its cyber work focused on critical infrastructures.

In the case of Systems Made Simple, Lockheed is getting a "twofer" – more capabilities in an important market and access to a huge contract vehicle that Systems Made Simple dominates.