GTE Bolsters Government Systems Unit

BR>

GTE Bolsters Government Systems Unit

GTE Corp. is melding two units into one in an effort to strengthen its presence in the federal market.

The Stamford, Conn.-based company is combining GTE Worldwide Telecommunications Services with GTE Government Systems. Both were based in Needham, Mass., which will be the headquarters for the new unit.

Thomas Muldoon, former president of the telecommunications services unit, will head the new GTE Government Systems.

Muldoon said combining the two units should create a more nimble and responsive government unit. "You have to be out front and you have to know what your customer wants," he said. "We haven't done that in all cases in the past."

GTE photo Thomas Muldoon, former president of the telecommunications services unit, will head the new GTE Government Systems

The revamping of the units began when John Messier, president of government systems, decided to retire after 35 years with GTE, Muldoon said.

"When John decided to retire, we began looking at the businesses," Muldoon said. "We saw a lot of synergy [between the two units] that would allow us to deliver better services to our customers."

The new unit will provide telecommunications, information and intelligence systems to defense and civilian federal agencies as well as field engineering services, logistics support and the installation, operation and maintenance of systems for GTE, the government and commercial customers around the world.

"This gives us the ability to deliver more effective programs," Muldoon said. "The market is changing on a daily basis, so it is important to have the technology and capabilities in place."

"This indicates an intention to improve performance," said analyst Robert Deller of Market Access International Inc., Chevy Chase, Md.

GTE's image suffered when the Health Care Financing Administration canceled a contract in August with GTE to modernize its Medicare reimbursement systems, Deller said. "They are under a microscope now," he said.

GTE recently was one of two winners of the Navy's Voice, Video and Data Infrastructure program. Known as ViViD, the program could be worth $2.9 billion. GTE is competing with Lucent Technologies, Murray Hills, N.J., for task orders under the contract.

Muldoon said that his unit also is very interested in an effort to modernize the networking and telecommunications services at the Pentagon. The market research firm Input, Vienna, Va., estimated the value of the Pentagon Renovation Program at $350 million. A request for proposals was issued in August.

"If there are opportunities in our main street business then we are going to pursue it," he said.

GTE has a demonstrated strength in the defense market, said Jack Reagan, an analyst with Legg Mason, Baltimore. "Financially, they have always done well," he said. "It is a good margin business for them."

But the challenge moving forward will be protecting those margins amid shrinking budgets and more competition, Reagan said.

With the rise of indefinite-delivery, indefinite-quantity contracts and the increased use of General Services Administration schedules, it is more important than ever that a company is proactive in pursuing new business, Muldoon said.

"You have to position yourself and you have to have some discriminating factors," he said.

Price often is a discriminating factor, but the new unit also brings together a lot of engineering resources, Muldoon said. "This will allow us to better focus on major opportunities," he said.