Lockheed To Sell Two Engineering Services Units

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WASHINGTON — Lockheed Martin Corp. announced June 2 it plans to divest two of its divisions, including one that provides systems engineering and integration services for U.S. intelligence agencies.

Bethesda, Md.-based Lockheed Martin will sell off its Enterprise Integration Group (EIG) because of the U.S. government’s increasing concerns about perceived conflicts of interest, Christopher Kubasik, the company’s president and chief operating officer, said in a press release.

“Through EIG, Lockheed Martin provides both systems and services to a broad range of government customers, and this has led to concerns about the potential for conflicting interests,” Kubasik said.

Last year U.S. President Barack Obama signed into law the Weapon Systems Acquisition Reform Act of 2009, which made it more difficult for companies to advise the U.S. government while also selling products to the government. Fallout from the legislation began last year with Northrop Grumman Corp.’s $1.65 billion sale of its advisory services group, TASC Inc.

TASC provides technical and advisory services to customers including the U.S. Air Force and National Reconnaissance Office (NRO), which builds and operates spy satellites. Northrop Grumman Aerospace Systems of Los Angeles, like Lockheed Martin Space Systems, is a major builder of classified space systems.

Lockheed Martin also will sell off wholly owned subsidiary Pacific Architects and Engineers Inc., which specializes in global infrastructure and disaster relief activities for civil government customers. The two divisions accounted for less than 3 percent of the company’s revenue and operating income in 2009, which were $45.2 billion and $4.5 billion respectively, the press release said.

Both divisions are now under Lockheed Martin’s Information Systems & Global Services business area. The business area saw sales increase 4 percent to $12.1 billion in 2009, but gains were offset by lower volume from EIG and Pacific Architects and Engineers, according to the company’s annual report, filed Feb. 25 with the U.S. Securities and Exchange Commission.

According to the Lockheed Martin website, EIG includes a remote sensing division that specializes in imagery system calibration and imagery exploitation and analysis systems.