Lockheed may get FBI computer pact

March 11, 2006|By BLOOMBERG NEWS

WASHINGTON -- Lockheed Martin Corp., the largest supplier of computer services to the U.S. government, beat Northrop Grumman Corp. for a contract to upgrade the computer systems FBI agents use to manage investigations, a person familiar with the competition said yesterday.

The agency has chosen a company to upgrade its computer system and is in negotiations over the contract, Federal Bureau of Investigation spokeswoman Catherine Milhoan said, but she declined to identify the company.

Joe Wagovich, a spokesman for Bethesda-based Lockheed, declined to confirm the order.

FBI Director Robert S. Mueller III has made it a priority to modernize the agency's computer system, which was faulted for its antiquity by a federal commission studying the U.S. response to the Sept. 11, 2001, terrorist attacks. The bureau has refused to disclose a cost for the project, called Sentinel.

Mueller told the Senate Judiciary Committee in July that it would take about 40 months to complete.

"This is a pretty big project," said Cai Von Rumohr, a Boston-based analyst with Cowen & Co. "I would be surprised if it didn't get to a run rate of $100 million a year."

Mueller has been under pressure from lawmakers who have grilled him several times about the potential costs and timetable of the upgrade. He scrapped an earlier modernization plan in April 2005 that was being handled by Science Applications International Corp. after the bureau spent $170 million.

The new contract helps Lockheed Chief Executive Officer Robert Stevens move closer to his goal announced in January of a "mix change" in sales. Stevens said that over the next few years he'll expand information systems and technology to as much as two-thirds of total sales, from half last year. Lockheed, best known as the maker of fighter jets like the F-16, had sales of $37.2 billion in 2005.

The award also extends Lockheed's existing relationship with the FBI.

The company has supplied an automated fingerprint-identification system to the bureau since 1999, allowing the processing of more than 100 million print searches over the past six years. Today, more than 50 million fingerprint records identifying individuals with criminal histories are maintained by the FBI on the system.

"Negotiations are still fluid but we hope to have the contract awarded within the next 30 days or so," said Milhoan, the FBI's spokeswoman.

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