O'Neill: Health will help fuel Northrop's growth

Northrop Grumman Corp.'s IT division will focus on health information technologies, energy and homeland security as its three major new market initiatives for growth, said the president of Northrop Grumman Information Technology.

James O'Neill also said that the company's IT sector will reach $5.5 billion in revenue in 2005. Last year, his sector generated almost $5.1 billion of the parent company's total, with about $3 billion of that from government IT sales. The IT sector's portfolio includes the federal government, state and local governments and commercial sales.

Health care is one of the largest opportunities, especially the federal government's initiative to computerize health records, O'Neill said, speaking at a corporate media briefing Tuesday. In March, Northrop Grumman acquired Integic Corp., a Chantilly, Va., IT provider that specializes in enterprise health and business process management solutions, for an undisclosed sum.

Integic, which had 2004 revenue of $161 million, has become part of Northrop Grumman's IT sector's federal enterprise solutions business unit. O'Neill declined to comment on other possible acquisitions in 2005.

In the area of energy, O'Neill said that Northrop Grumman will bid on the Energy Department's $2.1 billion contract to manage Los Alamos National Laboratory, scheduled to be awarded this summer.

He also said the company last week bid on another Energy Department contract for $1.5 billion to manage and operate the Nevada Test Site and its related facilities and laboratories, anticipated to be awarded during the summer.

"We look at energy as a very large market for IT going forward," O'Neill said.

Northrop Grumman's IT sector also will focus on homeland security. The company is the Homeland Security Department's systems integrator for its human resources systems using PeopleSoft software. It also designed, implemented and runs the department's classified, high-speed data network for the intelligence community, which includes state and local governments, first responders and the Defense Department.

O'Neill has been at the helm of Northrop Grumman IT for almost a year, overseeing 24,000 workers. The Herndon, Va.-based sector focuses on network engineering, security solutions and enterprise services. Northrop Grumman's other six operating sectors are electronic systems, mission systems, integrated systems, ship systems, space technology and Newport News.