Spunoff Lockheed Business Begins Operations as The SI

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A systems engineering and integration services unit Bethesda, Md.-based Lockheed Martin Corp. spun off this fall because of the U.S. government’s increasing concerns about perceived conflicts of interest has commenced operations as an independent company serving the U.S. intelligence community.

Based in Valley Forge, Pa., the company — dubbed The SI Organization, or The SI for short — was formerly an operating unit within Lockheed Martin called the Enterprise Integration Group.

The private equity investment firm Veritas Capital of New York agreed in October to acquire the business from Lockheed and run it as an independent company.

The SI Organization employs more than 1,800 employees and anticipates adding more than 300 people to its work force over the next year, the company said in a Nov. 23 press release announcing the completion of its transition from Lockheed Martin.

The SI’s chief executive officer, Bill Graham, said in a statement that the company would be “expanding our modeling, simulation and analysis support to core customers, as well as delivering these services to a broader customer base.”

Lockheed announced in June it was unloading the profitable business to comply with more stringent organizational conflict of interest rules imposed on companies selling both systems and services to the same U.S. government customer.

In 2009, U.S. President Barack Obama signed into law the Weapon Systems Acquisition Reform Act of 2009, which makes it more difficult for companies to advise the U.S. government while also selling it products. The impact of the legislation began to be felt last year when Los Angeles-based Northrop Grumman sold its advisory services group, TASC Inc., for $1.65 billion to a group of investors.