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By | Kat Hall 22nd July 2015 09:32

Lockheed Martin's bored with IT and going back to fast jets

So, military hardware is more interesting than tech procurement

US defence giant Lockheed Martin is considering flogging off its under-performing government IT division.

During an announcement about its second-quarter financial results the company said it will conduct a strategic review of the government IT infrastructure services business.

The programmes to be reviewed represent approximately $6bn (£3.8bn) in estimated 2015 annual sales, and approximately 17,000 employees, it said.

"The corporation expects the strategic review will result in a spin-off to its shareholders or sale of these businesses," it said.

Georgina O'Toole, analyst at TechMarketView, noted that total sales at Lockheed Martin remained stable at about $21.8bn (£14bn) for the first half of 2015. In contrast, net sales fell by 9 per cent to $3.7bn (£2.4), with profits nosediving from $296m (£190m) to $160m (£102m).

According to O'Toole, Lockheed is estimated to have turned over £270m in the UK last year.

Some of its high-profile government contracts include the increasingly troubled Future IT Sourcing programme at the Ministry of Justice, a programme operating the so-called Service Integration and Management (SIAM) model.

It also runs the Command & Control system contract with the Met Police and an application services contract with the Highways England.

O'Toole said: "It appears that IT services is a very different proposition to defence manufacturing & services, and we suspect Lockheed has found SIAM is a very different game to a managing a large defence programme. The planned spin-off highlights that the two don’t necessarily mix well." ®

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