TRW Buy Bolsters State and Local Business
By Andrea Novotny
TRW Inc. officials expect their union with BDM to yield a 15 percent annual increase in the company's state and local public safety business for the next several years.
Cleveland-based TRW's purchase of McLean, Va.-based BDM International Inc. for about $1 billion in December has one immediate payoff: an expanded presence in the state and local market.
The company's state and local government base will grow from 10 to 32 states, said Daryl Solomonson, director of business development for TRW's public sector.
The combined company's new systems integration division, called TRW Systems and Information Technology Group, will likely be structured around four market areas: defense, public sector, intelligence and commercial.
Although details are still being ironed out, BDM's state and local business unit is likely to be combined with TRW's public safety business unit, industry officials said. This unit could become part of the public sector unit, officials said.
"We intend to take advantage of our relationships with [state and local governments] and grow our public safety business," Solomonson said.
For TRW, part of that growth is expected to come from the sale of criminal justice information systems, Sol- omonson said. Such systems are designed to share information among different government agencies, including courthouses, police forces and jail houses.
TRW is developing a comprehensive automated information system for the San Jose Police Department.
In addition to records management, TRW provides public safety systems for automated fingerprint identification, emergency 911 and transportation, officials said.
In 1997, state and local governments bought information technology services worth $5.1 billion for public safety, including fire and emergency management and law enforcement, said Leslie Kao, a public sector market analyst with G2R Inc., a mar-ket research firm based in Mountain View, Calif. That's up 30 percent from $4.8 billion in 1996, she said.
BDM brings a host of projects to the state and local table, ranging from work on child welfare systems, to electronic benefits transfer and smart card technology, to data processing and telecommunications services to integrated justice information systems.
BDM's state and local systems smaller business units showed strong growth in the third quarter of 1997 despite a problematic state contract. Revenues in this small business unit were up 27 percent, according to an industry analysis prepared by Legg Mason Wood Walker Inc. and released in February.
For example, BDM is still installing a $3.3 million criminal justice information system intended to link jails, courts and the police, for McLean County, Ill.
The system, which was declared operational last September, is expected to save $1.2 million annually due to improved efficiency, state officials said.
In January, BDM won a nine-month contract valued at $1 million to install a modified version of its integrated justice information system for Oklahoma County, Okla., which has a population of 1.4 million, said Jim Weaver, vice president of marketing and business development for BDM's state and local government.
TRW's most recent win in the public safety area came from the city of San Jose, Calif. Under the $10.4 million contract, the company is developing an automated system for the San Jose Police Department so police officers can quickly retrieve crime data and prepare crime reports. It will replace a 20-year-old record system and several stand-alone computers, making information accessible throughout the department.
|TRW's State and Local Public Safety Business: |
- Projected to grow 15 percent annually over the next three years.
- Will gain more than $4 million from criminal justice information systems provided by BDM.
Prime contractor TRW started work on the four and one-half year effort last November. It will lead a team of five subcontractors made up of Hewlett-Packard Co. of Palo Alto, Calif., Cisco Systems Inc. of San Jose, Tiburon Inc. of Fremont, Calif., EdgeIS/Sarcom of San Jose, Calif., and Comp-uterbiz/Ina-com, also of San Jose.
When fully operational in 1999, the system will allow police officers to access a central criminal history database from desktop workstations at police headquarters, off-site locations and using laptops in the field.
TRW has also provided criminal justice information systems for the cities of San Francisco and San Diego as well as the state of Ohio, Solomonson said.