2016 Fed IT Profile: Lockheed Martin

Federal IT Top 100 Rank: No. 1

$12.02 billion

Federal IT executive: Sondra Barbour, executive vice president, Information Systems and Global Solutions

Lockheed Martin topped this year’s list as the No. 1 provider of IT products and services to the federal government. But the Bethesda, Maryland-based company is in the midst of realigning its focus, having announced earlier this year that it will sell its IT division, known as Information Systems and Global Services, to Leidos. The transaction is expected to close in the third or fourth quarter of 2016.

While Lockheed Martin will lose its IT business, the sale will allow the company to focus on its core business in aerospace and defense, said Marillyn Hewson, the company’s chairman, president and chief executive officer. “The new business will be positioned for growth while unlocking value for our stockholders,” she said.

Lockheed’s divestment of IT comes at a time when defense and military contractors are facing intractable hurdles in a chaotic world.

Speaking at a supplier conference in Fort Worth, Texas, in June, Hewson said defense customers are facing “one of the most challenging, dynamic and unpredictable environments” they’ve ever experienced. The threats are unprecedented, she said: Escalating conflict in the Middle East, a migrant crisis in Europe, rising terrorism, cyberattacks on government agencies, and provocative behavior from Russia, China and North Korea. At the same time, there is increasing pressure on the defense and civil agencies' budgets, she added.

Hewson called for industry to pursue three priorities: an intense focus on affordability, a collaborative approach to risk management and cybersecurity and tireless advocacy for industry and its customers. At the top of the list, industry must seek cost-saving innovations to drive affordability for customers.

Lockheed officials say they’re doing their part to propel innovations that will reduce cost. The company, for example, is pursuing projects on the energy front. At a newly built Oswego, New York, facility, Lockheed is applying bio-energy technology to turn waste into clean power. The energy produced will be used to offset electricity costs at the facility. The company also is developing efficient energy storage and energy-management facilities.

Energy is one of Lockheed’s principal business divisions: Aerospace and Defense, Space, Emerging Technology and Global Solutions are the other sectors.

Meanwhile, Lockheed’s Information Systems segment will continue to operate as division of the company until the sale closes. 

Factoring out non-IT related revenue, IDC Government Insights estimates the company generated $12.02 billion in revenue from the sale of IT products and services to the federal government during the government’s fiscal year 2015, ranking it at the top of the 2016 Federal IT Top 100 rankings. (Read the full story here.)

And the company recently won a $733 million contract to modernize sensor equipment for the U.S. Army Contracting Command — Aberdeen Proving Ground. The company will modernize platforms that support aerial intelligence, surveillance and reconnaissance data collection and air and ground-based processing for missions worldwide.

— Richard W. Walker

Read about top federal IT provider National Security Technologies: Next