Q&A Arthur Johnson

E-Commerce, Information Security 'Big Items' in Lockheed Martin's Game Plan

Arthur Johnson

As Lockheed Martin Corp.'s aerospace division struggles with launch problems and production delays, the $6 billion Information and Services Sector is seeing nothing but blue skies.

Arthur Johnson, 52, who became president and chief operating officer of the IT sector two years ago, has scored impressive government and commercial wins: NASA's Consolidated Space Operations Contract, worth $3 billion over 10 years; census contracts with both the United States and Great Britain; and outsourcing contracts with Nike and Gateway Computers. Only one big fish slipped away: the coveted IRS Prime award.

Johnson also is turning to hot markets such as electronic commerce, information assurance and outsourcing. And along with all other Lockheed Martin heads, he is performing a top-to-bottom review of the sector's organization, performance and strategic alignment.

Johnson mapped out where his sector is going with Washington Technology staff writer Nick Wakeman.

WT: How will the company's comprehensive review affect the Information and Services Sector?

Johnson: What we are doing is looking at all our businesses from top to bottom and making an assessment of performance and strategic fit, how our businesses fit in with the core business and the core competencies of Lockheed Martin.

When you do that, you can arrive at a lot of different answers. We may have a business that is core but isn't doing well. That doesn't mean we are going to get rid of it. It means we are going to do something to get it fixed.

We may have a business that is doing real, real well and we decide not to keep it. Not because it is not a good business, but because it doesn't necessarily fit as well with the other things we are doing.

WT: In recent years, several competitors have realigned their business units to focus better on the customer. Are you satisfied with the way you are structured, especially with Lockheed Martin being an amalgam of 17 or 18 companies?

Johnson: When we presented the sector's strategic plan to [Lockheed Martin Chairman] Vance Coffman and [President and Chief Operating Officer] Peter Teets, I talked about this issue of structure, and told them I'm pleased with the changes we have made so far. The organizational realignment in the sector gives us better focus on our customers, and we get the accountability I want.

But in our business, you are never done. Our federal market is changing very, very rapidly. The evolution of technology is changing very rapidly. Two big items I point out in our strategic plan are electronic commerce and information security. They are going to have a tremendous impact on the federal market and the state and local market.

WT: Can you give us more insight on that strategic plan and how it relates to electronic commerce?

Johnson: The government is doing a number of things now, but you are going to see a significant increase in the use of electronic commerce to bridge the gap between government agencies and the citizen.

An example of something that is the harbinger of things to come is a Web-based application we implemented in which citizens can apply for a driver's license renewal over the Internet, they can order car registrations and things like that. It is a capability we call GovernLink.

Let your mind start to expand and think about services that agencies such as Health and Human Services, Social Security Administration, Housing and Urban Development and the IRS provide. Think about services that get delivered either in an office or via mail and how electronic commerce can replace that.

Think about Internet applications today, and go back five years ... Nobody ever thought you'd be doing online auctions or buying books. Not because it was so far fetched, but your mind hadn't expanded to that point.

WT: What are you doing to promote these ideas?

Johnson: One thing we are doing is looking at our current work and seeing where Lockheed Martin has two sides of an interface. For example, say there is a tie between two agencies and they have to exchange data, and we are on both sides of that interface. How do we help those two customers bring an electronic commerce solution to that requirement?

In the state and local business, there is a tremendous opportunity to migrate the services we deliver today into the electronic commerce environment. Think about what is involved in child support enforcement and child support payment processing.

WT: What major opportunities is the sector pursuing?

Johnson: Across the sector, we are tracking about 300 individual bid opportunities worth about $18 billion. We'll winnow that down and bid on some number less than 300. What that is, I don't know yet.

A lot of the opportunities involve modernization and a lot involve consolidation. The Air Force has several things we are looking at, like the Integrated Space Command and Control program [potentially worth $1.5 billion over 15 years]. We are one of three competitors, along with TRW and Raytheon. It is a very important contract to the Air Force as they look to modernize their command and control systems.

On the space side, the Air Force is looking to modernize the launch ranges and satellite control network. We have the pre-eminent contracts in both of those arenas and are looking very closely at both of those opportunities as they evolve, to see how we will position ourselves to compete.

On the federal side, we are looking at taking our census program to a number of countries over the next couple of years.

We think we have a real strong selling card by virtue of the fact that we are doing the work in the United States, and we have started work in the United Kingdom. We are looking at places as far afield as South Africa and Poland.

The U.S. Customs Service is looking at a big modernization effort. That is exactly the kind of work that we do, so clearly we are following that. We expect if Customs goes ahead with anything like they are talking about today, we would be participating in it.

The last big one we are tracking is the Navy-Marine Corps intranet. We believe this is a systems integration job. They have a number of existing capabilities that they want to somehow put together to reduce costs and improve service. We are best known for our ability to take on large, complex integration projects and deliver high quality service.

WT: How has consolidation affected the way you bid?

Johnson: When you are an integrator, it is important that you have the credibility with a customer that says, "I'm going to pick the best teammates to deliver what you need." We put a lot of time into thinking about our teammates, whether it is another part of Lockheed Martin or if we are looking externally.

What consolidation has done is, those teammates used to be a set of smaller companies. Now your teammates are a mix. We compete fiercely against Raytheon today, and tomorrow we team with Raytheon. Same with Boeing or TRW. You never say never.

But there always is room for the smaller companies, because very often they have a particular application, a particular background that a big company doesn't have. That is what the customer wants. They want the guy who developed the system and has been supporting it for the past 10 years. They want that guy on somebody's team. So picking the right guy is important.

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