L-3 consolidates IT units

Company streamlines to move forward

Although the last calendar year could hardly be described as a disaster for New York-based L-3 Communications Corp., the company appears happy to have shaken off the worst effects of the recession. Despite a hit to its bottom line, L-3 soldiered on with a solid performance in the last quarter of 2009 and first of 2010.

Net earnings in 2009 might have dipped roughly 4 percent from those in 2008, but overall revenues rose 5 percent during the same period. L-3’s contracts backlog stood at a robust $10.9 billion. The company paid dividends for the fifth consecutive year, doling out some $670 million in cash to L-3 shareholders.

The company’s success earned it the No. 8 spot on the Top 100, with $4.2 billion in prime federal contracts.

The 2009 fourth-quarter results capped off "a very good year despite economic challenges and uncertainty about the U.S. defense budget,” said Michael Strianese, L-3 chairman, president and chief executive officer, responding in writing to Washington Technology inquiries. “We had key awards in every business segment: imagery and intelligence analysis work, communications for unmanned aerial vehicles, microwave products,…training, [and] helicopter maintenance services.”

Strianese said L-3’s intelligence, surveillance and reconnaissance business is an important driver of L-3's growth, pointing to particularly strong performance from the company’s Stratis business unit.

In January, L-3 consolidated two divisions to create L-3 Stratis, bringing together its IT services in one organization. Les Rose is the president of the Stratis group. Some of the services it provides include managed IT services, business assurance and governance, mission and business applications, and infrastructure program management.

The new division is focused on defense, civilian, state, local and international customers.

In early March, Stratis received a three-year contract valued at $230.9 million to provide intelligence support services to U.S. and multinational forces in Iraq. The contract potentially extends to November 2012. L-3 will provide program management, counterintelligence support, intelligence analysis, intelligence planning and multimedia services at various forward operating bases and facilities throughout Iraq and in Tampa, Fla.

A second Stratis win, also announced in March, is nominally a one-year deal, valued at $24.8 million, to provide imagery analysis that supports the Special Operations Command. The cost-plus-fixed-fee contract includes an initial base year and four option years, with the scope of service extending to November 2014. The potential contract award value could amount to $155 million over five years if all options are exercised.

In late April, another notable win came from the Air Force Central Command. According to the fixed-price contract, L-3 will furnish cyber operators to manage, monitor and defend Air Force IT and network assets against malicious attack. The deal could potentially be worth $152 million over five years.

Other major Stratis customers include the Defense Information Systems Agency; NASA; the Labor, Justice, State, and Health and Human Services departments; and the Environmental Protection Agency.

It possesses spots on several contract vehicles, including Alliant, Millennia Lite, Mobis and the General Services Administration's Schedule 70. Stratis also holds a spot on DISA’s Encore II contract and the National Institutes of Health’s Chief Information Officers Solutions and Partners 2 contract.

In mid-April, L-3 completed the acquisition of the Londonderry, N.H., firm Insight Technology Inc. Terms were not disclosed. Insight develops and manufactures mission-critical night vision and electro-optical equipment. L-3 said the acquisition, renamed L-3 Insight Technology Inc., could add as much as $200 million to L-3’s 2010 sales.


About the Author

James Schultz is a contributing writer to Washington Technology.

Reader Comments

Thu, Jul 8, 2010 Dave Augusta, GA

I'm all to familiar with the ISD and EITS consolidation/merger to the new STRATIS Division. I was as a systems engineer for L-3 and hit my 7 year anniversary with them in Dec 2009. Unfortunately, the merger also meant cuts to the support staff manning, including the IT Dept. So as of Jan 1, 2010, after investing 7 years of my life with L-3, I found myself out of a job with nothing to show for it. No severance pay, no thank you, nothing except a boot print on my behind. To make matters worse, they didn't even have the guts to tell me personally that my position was being cut. I found out while reviewing a powerpoint brief on the new STRATIS IT manning. Am I bitter over the incident? I'd have to say yes. But I do find comfort in watching their stock (LLL) continue it's downward trend. I'm retired Active Duty Air Force and my wife is currently Active Duty Air Force (47 years between us). It's my sincere hope that other separating or retiring service members see this post and think twice before contemplating employment with L-3. They used to be a great company to work for, but that started changing a couple years ago and has continually gotten worse. Unlike Lockheed Martin, L-3 has forgotten who they actually work for.

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