Top 100: Northrop Grumman invests for eventual market rebound

When the U.S. government market rebounds at some point this decade, Northrop Grumman will be ready to capture its share of new business because it never stopped investing in hot technologies.  

The Falls Church, Va., company continues to invest heavily in the U.S. market in preparation for the eventual upturn, said Kathy Warden, president of the company’s Information Systems division. “We continue to invest in those technology areas that will allow us to capture that growth when it returns to the U.S. budget environment,” she said.

Although she declined to offer a prediction of when exactly the downturn will end, Warden said the company has seen some favorable signs that perhaps things are gradually improving. 

“There is still a great deal of uncertainty around the budget environment,” she said. “Even given that uncertainty, we are starting to see a more normal procurement cycle. We are not being held back on new programs….And we are optimistic about where the domestic market will be a couple of years from now.”

Northrop Grumman is ranked No. 2 on the 2015 Washington Technology Top 100 with $7 billion in prime contracts. The company reported overall revenue of $24 billion for 2014, which was down slightly from $24.7 billion in 2013.

The company is reaping handsome rewards from its all-out push on global sales that has been under way for the past three years. This “serious set of initiatives,” as Warden describes it, has involved major infrastructure build out in Australia, Japan, Korea and Saudi Arabia. It also has entailed an expanded presence with the United Kingdom and a nascent presence in the United Arab Emirates, she said.

In January, Northrop Grumman announced that it was among the winners of a seven-year contract to furnish the United Kingdom with a wide range of cybersecurity technologies. Under the contract, the company will provide engineering and development services that will support data security and information assurance.

On the opposite side of the globe, the Defense Department said in December 2014 that South Korea had awarded Northrop Grumman a $657.4 million foreign military sale contract for RQ-4 Global Hawks. Under the contract, the company will furnish four RQ-4 Global Hawk unmanned aircraft systems, each of which will have an integrated sensor suite.

The company also has a deal pending with Japan’s Ministry of Defense, which plans to purchase an as yet unstated number of E-2D Advanced Hawkeye airborne early warning and control aircraft and Global Hawk UAS.

On the home front, Northrop Grumman is actively pursuing, among other opportunities, the Air Force’s stealth-designed, Long-Range Strike Bomber and the Missile Defense Agency’s Long-Range Discrimination Radar.

Cybersecurity remains a thriving opportunity for Northrop Grumman with U.S. government agencies and international customers. “We have been pleased with how the cyber market is developing,” Warden said.

In addition to its deal with the United Kingdom, Northrop Grumman has a number of key cyber technology engagements in the United States. The company announced in February 2014 that it had won a $350 million contract with the Homeland Security Department to furnish operational services to the U.S. Computer Emergency Readiness Team. Under the contract, the company will help US-CERT organize active defenses and swift responses to attacks on U.S. Internet infrastructure.

Northrop Grumman announced in March that it had won a also $73.6 million, four-year contract recompete to continue supporting the Defense Information Systems Agency’s Acropolis and Sensor Operations program that protects the agency’s networks from cyberattack and also furnishes continuous situational awareness for the networks.

“We always want to see [the cyber] market develop faster primarily because the threat is evolving at a very rapid pace, and we think it is important for our country’s national security to keep ahead of the threat evolution,” Warden said.