Northrop Grumman looks beyond DOD

Northrop Grumman is betting that its defense and intelligence expertise will be a lucrative asset in the government health information technology and homeland security markets.

“The nontraditional defense market is growing at a faster rate than traditional defense markets,” said Sidney Fuchs, president of the Civilian Agencies Group of Northrop Grumman’s Information Technology division, referring to the health IT and homeland security sectors.

Northrop Grumman is trying to win some big contracts in the new growth markets to position itself as a company in synch with today’s trends, Fuchs said at a Northrop Grumman briefing for reporters today in Washington, D.C.

Government contracts for IT, mission systems and technical services generate $10 billion in revenue for Northrop Grumman, and about half of that comes from the company’s Defense Department business. Although DOD’s IT needs continue to grow, Fuchs said his division wants to win contracts from civilian agencies, too.

The division is competing for the Homeland Security Department's Secure Border Initiative network contract, a multiyear program that could be worth $100 million in the next fiscal year, Fuchs said.

As for health IT, the company holds one of four contracts to build prototypes of the National Health Information Network and intends to do more work in that area, he said. As a result of its acquisition of Integic last year, Northrop Grumman is the prime contractor for DOD's e-health records system, known as AHLTA.

Disease surveillance and biodefense are other areas that Northrop Grumman regards as strategically important, Fuchs added. The company does considerable work for the Centers for Disease Control and Prevention.

Fuchs cited similarities among the company’s defense and intelligence work and the new areas of emphasis. For example, he said, intelligence, health IT, disease surveillance and homeland security all face data haystacks in which they must look for needles of important information.

Fuchs said Northrop Grumman will garner about $1.2 billion from homeland security work this year and about $500 million from health IT. He predicted those sectors would grow 8 percent to 10 percent in the next year.